Web Letters: Thievery Under TARP

"As with the entire banking bailout, the new plan of Obama's treasury secretary, Timothy Geithner, is likely to enrich the very folks who impoverished the rest of us..." Both this piece and the piece by William Greider, "Obama and the Big Dogs," come to the same conclusion: Obama has a choice.

That choice is to stand with the very actors that engaged in the greed, incompetence and fraud that is now crippling our economy, or stand with the American people against these pirates and their looting of our treasury. The choice couldn't be any clearer and it couldn't be any more important--for Obama's Presidency and the future of the United States ...

The removal, or not, of Timothy Geithner and his replacement, or not, will indeed reveal whether Obama is a man of the people or a tool of the scoundrels that caused this mess.

Michael McKinlay

Hercules, CA

Scheer's understanding of hedge funds, that they are "totally unregulated" and "operate beyond the law," is absurd. It speaks to the broad public ignorance of these investment vehicles that such words can appear in a respectable magazine. Hedge funds are most certainly regulated; the vast majority of their managers are registered with the Securities and Exchange Commission. Their "secretive" nature comes as a result of the law that they are not allowed to advertise, which goes a long way to explaining why most Americans, including Scheer, share a perception of hedge funds shaped predominantly by the mutual fund industry.

Hedge funds are not the danger here--of the 10,000-plus hedge funds in existence worldwide, only one has ever posed an iminent systemic risk to the financial system (Long-Term Capital Management in 1998), and that crisis was resolved without the US government losing a penny. New and excessive regulation of hedge funds will serve only to stifle the growth of small funds and make sure that large funds grow larger in an environment free of competition. More regulation does not cure all. Our nation's banks had government regulators physically present in their buildings, going over their books as the housing-credit bubble grew, and yet now the US taxpayer is on the hook for more than $700B in bank bailouts. Misdirecting blame for the current crisis to hedge funds instead of the copious culpable characters in government and the banking oligarcy takes us further away from solving our problems.

Christopher Brown

Lexington, KY