Bailout Is Being “Reworked” By Obama’s Economic Team

econ_9697s   Treasury Secretary nominee Timothy F. Geithner

Buried on page A16 of today’s (Friday’s) LA Times is the front-page-worthy article explaining that the $700-billion financial bailout is being overhauled to include money for homeowners, small businesses, and municipalities, and to free up credit markets–in other words, all that the original bailout promised but failed to deliver.

Working “night and day” is Treasury secretary nominee Timothy F. Geithner with the rest of President-elect Obama’s economic team. Only now, after burning through the first $350 billion, are they getting around to adding clearly defined conditions as to the use of the rest of the money so that it can be accounted for. Apparently, this time they remembered to stipulate that the money not be used for executive bonuses, retreats at resorts, holiday bonuses for executives, the use of private jets, country club memberships, and, in the case of AIG, an executive retreat at a swanky resort–all of which happened with the first half of the payout.

The first half has vanished without a trace, and without the requirement that the bailed-out firms trace it. Last month, when the Associated Press asked these firms how their public assistance was being used, they refused to answer.

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