It's About Time

The government has announced a plan to buy up toxic assets and to get private investors involved. I may be wrong, but wasn't this idea floated about six months ago by the Bush administration? I'm not sure why they didn't do it at the time, and now that the idea is back on the table Wall Street seems to be quite favorable.

To be sure, the private investment component is new, and I like it. They're also showing a bit of fiscal responsibility at last, in that they're going to launch the program and see if it's successful before asking for more money to expand it to the levels needed.

Two fairly smart actions by the administration in one day. I hope this is the beginning of a trend.

Glenn Reynolds, however, thinks the damage has been done already:

“U.S. Treasury Secretary Timothy Geithner said on Sunday that help from the private sector was critical to get toxic assets off banks’ balance sheets and help resolve a credit crisis.” Even on NPR they were skeptical that private investors would want to get involved, for fear that they’d wind up facing punitive taxes if they made “too much” money.