Neel Kashkari has surfaced.
As now routinely happens, some unknown person is thrust unprepared into the spotlight of the world's gaze. He retreats, writes The Book(or more commonly, works with a ghost writer), coaches for The Book Tour, hopefully makes some bucks for his pains, and moves on to the rest of his life.
Sweet.
Remember that out-of-body experience you had when you first heard of TARP, and then read the initial proposal floated to Congress? You know, the one that essentially turned the country over to the Secretary of the Treasury?
Neel drafted it.
Jesse, linked above, has the story, and some pithy insights to share. I hope you read them.
But here is how the 'priesthood' at Treasury decided that $700 billion dollars was the figure to demand:
In February 2008, Mr Kashkari was charged with drafting an emergency plan in case the credit crunch became a full-blown financial crisis. By October the crisis had arrived and his ten-page plan became the blueprint for the banks' bailout that Mr Paulson presented to Congress.
Mr Kashkari admitted that he plucked “a number out of the air” when deciding with Mr Paulson how much funding to request from Congress for the Tarp.
He told The Washington Post that he used his BlackBerry to calculate the bailout figures: “We have $11 trillion residential mortgages, $3 trillion commercial mortgages. Total $14 trillion. Five per cent of that is $700 billion. A nice round number.”
A nice round number, indeed.
I'd love to go create my own 'round number' credit line demand, be able to walk into a bank with a shotgun, hold the tellers hostage, and walk out with my own nifty credit card. I won't even need to pay it back, and the bankers will pour me champagne to celebrate my accomplishment.
I wouldn't even ask for that much. A billion will do.
A nice, round number.
Sweet.
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