BAILOUTS

Will The Rich Save Our Banks?

Details are beginning to come in on Treasury Secretary Geithner's notoriously vague bank rescue, which involves corralling wealthy investors into financing a government-led bailout. According to the Washington Post, the government will lend nearly $1 trillion to hedge funds, private equity firms, and other investors to buy highly rated securities that would finance consumer lending. The government backing will act to subsidize what might otherwise be a riskier investment in the ailing financial sector, where major banks like Citigroup are on the verge of being de-listed on the stock exchange. In addition to the securities, the government would commit an additional $1 trillion towards encouraging rich investors to buy up toxic assets from banks to help clear their balance sheets. Big investors helped get us into this mess—will they get us out of it?