SEIU Secretary-Treasurer Anna Burger issued a statement yesterday commenting on Treasury Secretary Timothy Geithner's latest TALF proposal to invite private equity and hedge fund investors to a fire sale of bank assets--a fundamentally flawed plan Burger says is no more than a "return to the very same policies and practices that triggered the financial crisis in the first place."

From the statement:

Secretary Geithner's proposal for the Term Asset-Backed Securities Loan Facility (TALF) would enable private equity firms and hedge funds to buy up higher quality loan securitizations, including auto, consumer, student and small business loans. The Federal government would provide low-cost financing for up to 95% of the purchase price, with private firms putting down as little as 5% and the securitizations as collateral. The hope is then to expand this proposal to include toxic mortgage-backed securities.

Each of these programs could cost taxpayers up to $1 trillion. If the private firms make a profit from the deal, they keep all of it. If they end up losing money, they are only on the hook for the nickel or two of equity they put in. The taxpayers would then assume the rest of the losses. Even worse, subsidizing the purchase up to 19-to-1 will drive up the price of the assets, which would be yet another gift to the same banks that caused this crisis while at the same time putting taxpayers at a much greater risk of bearing huge losses.

Firedoglake's Ian Welsh has a palpable reaction upon reading Anna Burger's 'succinct description' of Geithner's plan for convincing private investors to buy up assets. "Under Geithner's plan, the government accepts all the risk and none of the profits and puts up almost all of the money? This is ideology run rampant at the cost of common sense," writes Welsh.

"Burger is right when she says that this plan will lead to yet another bubble. Ultra-cheap financing with no risk for the investors is exactly what investors thought they were getting with collateralized debt obligations. They were wrong then, but this time they'll be right, because Geithner is giving them the money. And the result will be artificially high prices, which taxpayers will have to pay off when they crash..."

Geithner's theory is that recipients of TALF money will use it to make new auto, consumer, student and small business loans. However, given Main Street's experience with bank bailouts, this plan's supposition that U.S. taxpayers' money will actually be used to make new loans seems pretty hard to fathom. Geithner's proposed TALF plan lacks any real implementation structures and seems to have a lot more in common with the "fast money" schemes that spiraled our economy into crisis, rather than a program that would be in the public's best interest and deal fairly with consumers, workers and investors.

At the plan's unveiling last week, Geithner vowed to bring the "full force" of the U.S. government to battle the financial crisis, assembling an 'unprecedented coalition of agencies and mustering federal resources on a scale rarely seen except at wartime.'

What Geithner actually accomplished with the plan's announcement: widespread confusion from many of our country's leading financial minds on how the plan is going to work. From NY Times' Paul Krugman:

An old joke from my younger days: What do you get when you cross a Godfather with a deconstructionist? Someone who makes you an offer you can't understand.

I found myself remembering that joke when trying to make sense of the Geithner financial rescue plan.

There's something terribly alarming about a Financial Stability Plan that even leading economists refer to as "vague."

"This is, thus, in the end, simply another bailout," writes Firedoglake's Welsh. "It could wind up costing taxpayers $2 trillion. Kind of makes one long for the old days when the bailout was $700 billion, doesn't it?"

For more on Geithner's latest TALF proposal, visit www.SEIU.org.