Goolsbee goes out of his way to make it seem like the private investor and the government are equal partners:

The leverage is not insurance. The ‘insurance’ makes it sound like the government is gonna take the losses if something goes wrong, and that’s not true. This is an explicit partnership where if the private guy makes money, the government makes money, and if the government loses money, the private guy loses money. This is an outright partnership.
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Both sides have skin in the game.

This distorts the point, and borders on Bush-level obfuscation. Why? Krugman:

Leave on one side the question of whether the Geither plan is a good idea or not. One thing is clearly false in the way it’s being presented: administration officials keep saying that there’s no subsidy involved, that investors would share in the downside. That’s just wrong. Why? Because of the non-recourse loans, which reportedly will finance 85 percent of the asset purchases.
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Notice that the government equity stake doesn’t matter — the calculation is the same whether private investors put up all or only part of the equity. It’s the loan that provides the subsidy.

And in this example it’s a large subsidy — 30 percent.

The only way to argue that the subsidy is small is to claim that there’s very little chance that assets purchased under the scheme will lose as much as 15 percent of their purchase price. Given what’s happened over the past 2 years, is that a reasonable assertion?

Nemo:

The bank unloaded assets worth $5000 for $8400. So the private investor gained $100, the Treasury gained $100, and the bank gained $3400. Somebody must therefore have lost $3600…

…and that would be the FDIC, who was so foolish as to offer 6:1 leverage to purchase assets with a 50% chance of being worthless. But no worries. As long as the FDIC has more expertise in valuing toxic assets than the entire private equity and banking worlds combined, there is no way they could be taken to the cleaners like this. What could possibly go wrong?

Obama’s economic team is multiplying. I think this might end up like Gremlins, with each successive Obama shill more evil than the one before.

Goolsbee’s little word games are the kind of thing that would launch a thousand blog posts calling for his head during the Bush years. But he’s Obama’s guy, so it’s, what, OK with you? It used to be that I couldn’t write a post having to do with Obama without getting hammered for not believing in “The One.”

The silence is fucking deafening right now.