Recapitalization Plan

That is more accurate than "bailout", in which case you just basically throw money at a problem. Why is this different than a bailout? The U.S. government did this in 1929, and in the late 1980s. They bought distressed assets from banks, and other financial institutions. This removes bad assets off bank books, thus creating capital. Then the government resold, or collected interest from the assets they purchased. The government made substantial profits both times they recapitalized the financial system.

I called one of my former college professors today. He is very astute; and still does some teaching, as well as consulting work in the banking industry. He thinks the government will make money this time as well. This is not substantially different than past interventions. I also asked him what he thought of Ron Paul's claim that this action will "destroy" the dollar. He disagrees. We are not out of the woods. This should have been done earlier in the game. Of course hindsight is always 20/20. I hope it is not too little too late for the economy in general. We will almost certainly have a bad recession, but hopefully avoid something worse. This recapitalization should help.