The Bailout as Bay of Pigs

It took JFK three months to stumble over the no-win Cuban invasion he inherited in 1961, but Barack Obama is in a deeper mess as he makes his first visit to the Oval Office more than two months before taking over.

The Bush Administration is fumbling the financial bailout in ways that make CIA planning for the Bay of Pigs look brilliant, and this time the new president won't have the option of pulling back and starting all over.

First results from takeovers of Fannie Mae and AIG show huge losses, reflecting a failure to stop the bleeding, and according to the Washington Post, "underscore the government's difficulty in intervening in private markets in a way that both protects taxpayers and ensures that the rescue efforts succeed...a cautionary tale at a time when Washington is debating whether to extend the federal umbrella to Detroit automakers and other beleaguered firms."

After interest rates on the original handouts proved too high to keep AIG from drowning in debt, the government agreed yesterday to offer a stronger lifeline with a new $152 billion loan on easier terms.

Fannie Mae executives are warning that their bailout funds "may prove insufficient" to allow the company to pay off loans or "continue to fulfill our mission of providing liquidity to the mortgage market at appropriate levels."

Meanwhile, Bloomberg News is suing under the Freedom of Information Act to force the Federal Reserve to identify the recipients of almost $2 trillion of emergency loans from American taxpayers and the troubled assets the central bank is accepting as collateral.

Even before he takes office, President Obama may find himself asking the question that plagued Casey Stengel when he took over the hapless New York Mets, "Can't anybody here play this game?"