Right Wing Finance

I know, this isn’t a surprise. But it’s the opinion of William Black, professor at the University of Missouri-Kansas City School of Law.

He’s “dumbfounded” as to why Geithner made the deal he did with CIT and ended up burning billions of tax payer dollars for nothing.

The prepackaged plan allows CIT to restructure its debt while trying to keep badly needed loans flowing to thousands of mid-sized and small businesses. The plan keeps CIT’s operations alive and makes it possible for the company to exit bankruptcy by year’s end.

But here’s the bad news: While senior debt holders will only lose 30% of their investment, we, the U.S. taxpayer, will lose the entire $2.3 billion we lent the company this summer.

It’s unclear as top whether Geithner is incompetent or corrupt – one could argue both, as it’s a matter of taking him at his word or not. If we take him at his word, he’s incompetent. Ex: he didn’t know he was supposed to pay his income taxes? If we think he’s not quite that stupid, then he is lying and therefore has ulterior motives.

Here’s the interview with Professor Black:

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