You know what the bailout feels like? This is what it feels like:
You're walking down the street, minding your own business, when the guy in the scruffy clothes approaches you with his tale of woe. He used to be a productive member of society, he tells you, but then things took a turn, and lately he's been down on his luck and struggling to keep body and soul together. What he could really use, he tells you, is a dollar so he can get something to eat. He hasn't had a meal all day, and he's just a dollar short of a sandwich.
So you reach into your pocket and press a crumpled bill into his outstretched palm. He thanks you, and wishes you a wonderful day, and as you continue down the street, you cast one last glance over your shoulder and see the guy walk into a liquor store.
That's what it feels like. Only multiplied by 700 billion.
700 billion being the number of dollars the Congress of the United States recently agreed to give to the Secretary of the Treasury so that he could set about solving the credit crisis by buying up the "toxic assets" that were clogging up the financial system.
And now, just weeks later -- with half of the 700 billion already in hand and the rest soon to follow, with lots of those billions already disposed of, but without buying a single "toxic asset" -- Henry Paulson stands before the microphones and says, approximately, "Never mind."
He's decided to use the money for something else.
Oh?
Unsettling but true: The secretary has now officially abandoned Plan A. Instead of getting things flowing again by taking on the burden of those rotting mortgage-backed securities, the secretary has now decided to get things flowing again by injecting money directly into the banks themselves. How? By buying ownership stakes in individual banks.
Wait -- there's more!
The secretary is also considering setting up a brand-new "special-purpose" lending program, targeted not at banks and Wall Street firms, but at the companies that finance car purchases, make student loans, issue credit cards. The goal? Making credit more available to consumers -- you remember consumers, don't you? -- who'll start spending again, which will create a demand for more products, which will kick-start the manufacturing sector, which will...
That's the idea, anyway. The latest idea. Of course, by the time you read this, there may be an entirely different latest idea.
And by now, the thought has probably occurred to you: They're making this up as they go along!
You betcha. That's because nobody has ever seen anything exactly like this before, moving as quickly as this, or as broadly as this. And nobody -- not even the Secretary of the Treasury -- is sure how to deal with it.
So if Plan A stops looking like the right solution, there's always Plan B. If Plan B doesn't cut it, get ready for Plan C. Will one of them work? Your guess is as good as mine. (It may be as good as his.) Is it better than doing nothing? Probably.
"I will never apologize," says the secretary, "for changing the approach and the strategy when the facts change."
Henry Paulson isn't walking into a liquor store after all -- he's just looking for the right sandwich.
Meanwhile, we could all use a stiff drink.
Rick Horowitz is a syndicated columnist. You can write to him at rickhoro@execpc.com.