The first speech by bailout guru Neel Kashkari reveals that the $700 billion bailout plan to save the world is turning into a Wall Street WPA program (WSWPA). What a disappointment!
WSWPA started off by hiring a law firm -- Simpson Thatcher & Bartlett LLP! And it hired a consultant -- Ennis Knupp & Associates -- to help Kashkari evaluate which of 70 Wall Street firms will get their share of the gravy train. To be fair, Kashkari mentioned a voluntary program to invest in healthy banks -- but it sounds far from aggressive to me. So the U.S. is announcing its plans to dole out our tax dollars to enrich Wall Street firms while Britain has already taken action to shore up its banking system.
Perhaps disappointment with the glacial pace of U.S. response to this financial crisis helps explain the somewhat anemic stock market action. Futures had indicated a 6% rise; however, markets are currently up a relatively mild 4.2%. I find it interesting that the administration is choosing to use Kashkari's discussion of the nuts and bolts of a government contract for Wall Street as the best way to lead us out of this financial crisis.
November 4th cannot come too soon.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.
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