The Treasury Department released a rough outline of how the government plans to manage the $700 billion recovery plan yesterday, the New York Times reports. Among some of structure provisions is a timetable to have things ready in six weeks. They also formally announced that Neel Kashkari, 35, a former executive at Goldman Sachs who is an assistant secretary for international economics, will be in charge of the newly created Office of Financial Stability. Click on through to the other side…
The Associated Press did a little bit of homework on Kashkari, calling him the “New Bailout Chief.” Seems he’s been a top adviser for Treasury Secretary Paulson since his days at Goldman Sachs, and has worked in and out of government for years. What is not entirely clear is for how long Kashkari will be in power. Reports in the Wall Street Journal indicate that he’s being considered for “interim basis,” and that he’ll likely not be around after January. He, along with Treasury general counsel Robert Hoyt and head of legislative affairs Kevin Fromer put together the original bailout legislation, before it was roundly rejected by Republicans in the House.
From my point of view, all this appointment will mean is that if things turn south, Congress will have a name and a phone number to interrogate. The overall timing of this crisis will have Congressional hearings lined up well into the 2020’s because anything being set up now will undoubtedly take on a different form under the new administration in January 2009.
However, that being the case, we should find ourselves rather busy for the days and weeks to come, trying to figure out where and how this money is going to be used. According to the aforementioned New York Times story, the Treasury Department will plan “to outsource almost the entire project.” Treasury wants to hire one company as a “financial agent” to set up the basic system, and then “hire multiple investment managers that would each be responsible for different kinds of assets,” such as subprime mortgages, mortgage-backed securities and derivative instruments like collateralized debt obligations. For more fun rants and raves, please visit my very own blog, The Procurement Pub. Cheers!
