Treasury Myopia

UPDATE: Ramirez***This elitist masters of the universe mentality is what got us into this mess in the first place. WSJ, "Treasury's Very Private Asset Fund: Why write the rules to favor only a handful of bidders?" And these bidders?: 

But the bigger shock was when Treasury released its application to become a fund manager, a main rule of which is that only firms that already have a minimum of $10 billion in toxic securities under management can apply. Few hedge funds, private equity players or sovereign wealth funds come near this number. The hurdle would bar many who specialize in the very distressed assets that the Obama Administration is trying to offload from banks.

An open process guards against myopic mistakes. And why would we want to perpetuate too big to fail as a policy? There is another concern as well:

"This is ugly," says Joshua Rosner, the managing director of Graham, Fisher & Co., an independent research firm. "As long as they are experienced, there is no rational reason for creating limitations on who becomes a bidder and manager of assets. It doesn't serve the public good, though it may serve those few large firms that appear to have a privileged relationship with Treasury."

We have no idea if Treasury is playing favorites, but it certainly doesn't look good. All the more so given that some of these big players may have consulted informally with the Obama Administration as it was writing the plan. Not to mention that the big asset management companies that are most likely to land plum fund-management jobs are also the ones that have been most vocally praising the Treasury plan. (Treasury declined to comment.) 

This is a recipe for failure and a loss of public confidence in the Obama administration. Open up the process, or voters will be justified in seeing a self-dealing Chicago Machine, New York insider axis ranged against their interests as taxpayers.