On October 28, as the Treasury Department announced a series of steps to begin delivering infusions of a $250 billion government bank-recapitalization plan, White House spokeswoman Dana Perino used carrot-and-stick language to convince the nation’s banks to lend more money.
In its latest desperate move to head off the inevitable recession, the Federal Reserve announced Tuesday the creation of another new facility, the Money Market Investor Funding Facility, which will provide up to $540 billion dollars in new funds to back the purchase of short-term debt from money market mutual funds. Much of the debt, all of which will expire in three months or less, will consist of CDs and commercial paper.
In what is unabashedly being called a "partial nationalization" of the U.S. banking industry, the Bush administration announced Tuesday morning that the federal government will be purchasing $250 billion worth of preferred stocks in all of the nation's nine largest banks. Ostensibly to avoid any appearance of bias, healthy and ailing institutions alike are being forced to submit to the program, the first of what will surely be a train of dictatorial moves by Treasury Secretary Henry Paulson, who has been granted unconstitutional plenary authority over the entire financial sector as a result of the recent bailout bill.