Treasury unveils changes in rescue package

I watched most part of Treasury secretary Hank Paulson’s press conference last night. The brains behind the Treasury Rescue Package was updating the nation of what actions were done since Washington approved of it more than a month ago.

The capital purchase program, as the secretary dubs it, was initially meant to buy toxic assets from banking institutions compounded by the housing turmoil. The idea was to free these banks of illiquid assets for them to start with their normal banking operations like lending, the blood source of all economic activity. We even saw how Congress fiercely went back and forth in order to secure the fine print before it could reach President George W. Bush’s desk

Of course that was then. Now, Paulson is singing a different tune. He is now backtracking on his initial theory of federal government purchase into mortgage-tainted assets, saying it was not such a good idea after all. He is now even considering non-bank institutions, such as those who offer securitization of credit cards, auto loans, and student loans, to get a piece of the action of the TARP’s hefty $700 billion ammunition.

Not too many are pleased with the news, though. Some feel these guys from the Fed, FDIC, and the Treasury are almost always behind the curve throughout this crisis. Last night was another indication of such and basing upon all actions taken by the government, theirs could prove to be a very expensive trial and error.