Today’s Washington Post describes the Treasury Department’s latest plan:

The government is seeking to resuscitate the nation’s crippled financial system by forging an alliance with the very outfits that most benefited from the bonanza preceding the collapse of the credit markets: hedge funds and private-equity firms.

The initiative to revive the consumer lending business, outlined by officials this week, offers these wealthy investors a new chance to make sizable profits — but, thanks to the government, without the risk of massive losses.

That would be like the government guaranteeing the mortgages of all the homeowners who are “underwater,” but letting the homeowners keep all the profits if their homes rise in value and they’re able to sell at a profit. Something tells me that wouldn’t fly. As Atrios says,

They made bad bets when they at least theoretically thought they could incur losses. Now the cunning plan is to hope they make good bets even though…no chance of losses!

This is all going to end really badly.