We seem to be sweeping back around to the original TARP idea — buying up the banks’ ‘toxic assets’ to allow them to clear the decks and start lending again. It’s not completely clear to me whether this is being pushed mainly by the carryover regulators like Sheila Bair who are trying to sell the idea to the Obama team or whether it’s actually the Obama team that’s now carrying this ball. But just as it was when this was Paulson’s and Bernanke’s idea back in the Fall, the whole premise is based on the idea that the US taxpayer buys these securities for far more than they’re worth — which we could do more honestly, if no more wisely, by just giving the banks a bunch of money to help them get back on their feet after losing so much money.

The tell is in the article that got this ball rolling in the Journal on Saturday (emphasis added): “Ms. Bair said the assets could be purchased at fair value, the figure banks use to value their own assets. Such a move would remove the challenge of placing a price on assets that rarely trade.” In other words, buy these things at what the banks insist they’re worth, even though everyone seems to recognize that the essence of the problem is that the banks are still sitting on massive losses they’re still unwilling to account for. (The same article in the Journal notes a study which holds that the banks have so far accounted for only about half their losses.)

The lesson here is the one Orwell was teaching in his famous essay on language. Garbled language leads to garbled thinking and is an invitation to lying. “Toxic assets” is simply the buzz word for stuff banks bought for far more than it was worth. Period. All these buy-back schemes involve buying them for the price the banks want them to be worth.

It’s like a scene out of some bizarro, Wall Streetified Antique Road Show. The bankers come in with their old china and cabinets from the attic that they’re sure are worth $20,000. Sadly, the appraiser informs them they’re only worth about $850. Only of course they’re not from the attic. They bought them only last year convinced $20,000 was a steal back at the height of the antique crap craze. And now they’re condemned to roam the byways of America looking for an appraiser or antique buyer who will finally recognize the true value of their crap and pay them $20,000 to help them get their money back. Unless of course we agree to pay them $20,000 for it now and let them get back to their lives and stop all the craziness.

I think we’ll probably need to spend a lot more money unwinding the mess the banks got us into. But I don’t see how this verbal nonsense is any more than a way to keep the shareholders of the banks whole.

Poetic justice alert: Displaced GOP political appointees struggling to find new jobs in abysmal labor market they helped create. That and the day’s other political news in the TPM Election Central Morning Roundup.

So much is happening today. We hope to bring you an inauguration eve interview with Rep. Barney Frank later today and we’re also going to be launching a new blog. But I just have to comment on how bizarre it is that the folks down at Gitmo are rushing to get through one more day of military tribunal hearings before President Obama presumably suspends or otherwise cuts short the process tomorrow. I did not realize it would be this surreal, literally getting in as much as they could until the very last minutes of the Bush presidency.

Remember too, President Bush has roughly 26 hours left to exercise the pardon power, whether the old-fashioned kind or those for crimes and liabilities in which he played a part. Taking the Gitmo stuff down to the wire is making me think he’s going to put those remaining hours to good use.

The Manifest Hope Exhibit is an art gallery open during the inauguration that gathers together an array of visual artwork all focused around our incoming president. TPMtv caught up with Shepard Fairey, the artist behind the iconic Obama “Hope” poster and asked him about the story behind the poster and his thoughts on the coming administration.

Full-size video at TPMtv.com.

Today, on the eve of the inaugural, TPM is launching a new politics blog, TPMDC.com. It’s the successor to TPM Election Central. Our team covering the Capital under the new administration will be Elana Schor, who joined our team earlier this month, covering Capitol Hill, Matt Cooper, formerly of Time, Newsweek, et al., covering the White House and the rest of the Obama administration and Eric Kleefeld, a veteran of our 2008 EC team, covering the political world from TPM Headquarters in NY.

First, let me welcome Matt Cooper to our TPM team (you can see his introductory post here). I’ve been a fan of Matt’s for years. And we’re excited to mix Matt’s 20+ years of experience covering Washington, with all the insights and sources that entails, with the new approach to reporting we’re working to create. We think both will add to the other.

We plan to hire one more reporter-blogger for the site; and David Kurtz and I will also be reporting and editing for the site.

The premise is simple. Though the phrase is endlessly overused, tomorrow is genuinely a new day in American politics. A new Democratic president, expanded Democratic majorities in the House and the Senate no longer encumbered by its earlier dependency on incumbency and legacy of solid South. And all of this beginning in a climate of genuine national crisis. We want to understand it. And we believe we are uniquely placed to chronicle the story.

As we have in every other project we’ve undertaken, we’re doing this in partnership with you. We need your tips, your insights and your critiques. So if you’re in the new administration, keep us posted on what you think is happening. And same to all of our reader-sources on Capitol Hill. And most importantly for our readers not residing within the Capital Beltway, we need your insights and perspective. We want to dig into the details of what’s happening, understand the complexities and messiness of the city without becoming captive to its often insular mentality. In it but not of it.

On a personal note, TPM began just over eight years ago as a blog written from Washington. I moved to New York at the end of 2004. And it was from New York that we started growing TPM as an actual news outlet with multiple reporters in 2005. I’m still a little surprised at how much it’s grown. And we have ambitious new plans for 2009.

So please visit the new site, take its measure, let us know your reactions and help us make it the best site covering the new Washington there is.

From TPM Reader RB …

Ever since I saw Saturday’s post asking for everyone’s thoughts on what the inauguration means to each of us, I’ve been giving it some thought now and again. Initially, I kept coming back to the (almost by now hackneyed) thoughts of hope, optimism and the promise of a better government, alternating with sheer relief that the Bush administration is finally over with. But that struck me as rather obvious, and only touched the surface of what has been an emotionally and intellectually complex–for me, anyway–general election.

And then I read that Arlen Specter spoke in Philadelphia Saturday to help kick off Obama’s whistle stop journey to D.C. I realized that when I read that, I immediately tensed up unhappily. My visceral, kneejerk reaction was one of almost anger at the idea that a republican would have such a high-profile presence at an event for a democratic president-elect. My president-elect. I paused to think about my reaction, and about why Obama invited Specter to speak at the event. I thought about his ideas on government expressed in Audacity of Hope. And I thought about why I’d grown so angry at all things republican, beginning in 1994, but really crystallizing over the last eight years. I had to take a deep breath and remind myself that this kind of cooperation, the idea that we should work together without regard to party affiliation, is exactly what made Obama so compelling to me in the first place. Then I read the NYT piece detailing how Obama has reached out repeatedly to former rival McCain, and I had to catch myself to keep from having that same reaction. I had to remind myself that our government wasn’t always about two competing parties, always at odds and always acrimonious. It’s going to be a hard habit to shake off (for all of us, I imagine), but I finally realized that what this inauguration means to me is that we have an opportunity to truly put aside partisan rancor and focus on perfecting our union, and that feeling comes as a kind of happy relief. And that applies to all of us, not just the office holders in DC.

From TPM Reader JB …

Honestly, my dominant emotion on anticipating this inauguration is melancholy.

It is part of the American national character to imagine a new day, to believe as Ronald Reagan was so fond of saying that “we have it in our power to begin the world over again.” Americans are perhaps alone among the world’s peoples in believing this, and it may be more true here than it is anywhere else. But it is not entirely true even here,

I rate the symbolic value of Barack Obama’s inauguration lower than most; to my mind symbolism without substance is for suckers, and we haven’t seen substance from Obama yet. I reserve the right to revise my opinion later, and dearly hope I will be able to, but I cannot forget the staggering failures, the personal unworthiness and systemic decay that have made Obama’s accession to the Presidency possible. The first half of the 20th century was a period of great hardship and devastating wars; that the period that succeeded it was marked by a general increase in prosperity and the spread of freedom throughout the world even in the shadow of the greatest threat mankind had ever known was largely due to American power and American leadership.

These trusts were inherited by the last administration and recklessly squandered. America’s good name was sullied, her power diminished, and a lot of people got killed. However, it is not just the outgoing President and his administration that have let the country down. Congress, the very heart of the American system of government, has made itself less relevant to national policy, while decadence and corruption have pervaded a culture of a people more capable of seeing the potential of man than any other, but also one prone to conceit and empty self-congratulation.

These are heavy burdens to be inherited by the new President, and not burdens he ought to be expected to bear alone. His challenge, and ours, is a challenge we have made for ourselves, the greatest we have imposed on our own country since the war that almost destroyed it so long ago. I contemplate with melancholy the necessity of meeting that challenge, and the sorely limited resources I have at my disposal to ensure it is met successfully.

From TPM Reader TB

I’m probably one of your standard readers: 40, white male, progressive, and very cynical. If pushed, I would agree to the statement “I love my country”, and I have traveled enough abroad to realize what privileges we have here and usually take for granted. Yet for most of my life, my love of America, has been similar to what I think Al Franken once stated, is the way we adults love family members that have deeply disappointed us — critical, sometimes too judgmental, and sad/angry at the waste of so much potential.

Yet this last year it has changed, and with the election and coming inauguration, I feel a true sense of pride, optimism, and real patriotism. Suddenly it does not feel squishy to sing along to “America the Beautiful”. And I am not ashamed to say that I had tears streaming down my face as I sang along with Bono doing Pride and City of Blinding Light. I felt all these emotions at once — gratefulness to all that have sacrificed before us to make this country a better place, as imperfect as it may be, and a real sense of (yes!) hope of what we actually do have the potential to become if we can all just come together and work for the common good of our country in the next (hopefully) 8 years.

That Obama has already started and instilled this feeling is a testament to his power and promise, and also to the incredible sense of danger mixed with opportunity that this time has given us.

From TPM Reader CL …

At our magnet school in South Central Los Angeles, I was asked to say a few words to about 120 of our male students the day after Obama was elected. I told them that this year (then 2008), the person our school was named for–Martin Luther King–was assassinated forty years ago. And I told them that if at that time, or ten years later in 1978 or ten years after that in 1988 or ten years after in 1998, they had placed a wager with me or anyone living that America would have a black president in 2008, they would have won a lot of bets. I mean, they would have been rich. Because in all of those years, to think that this country would elect a person of color as president was beyond the realm of possibility. Most of my students are black and brown. Until Obama was elected, the idea of being president of the United States was, frankly, so far outside of their experience it was not something they could relate to. Now, that’s changed forever and I cannot overstate the importance of that.

From TPM Reader SH …

I’ve lived in America ever since I was five, but I only recently became a citizen at the age of 35. In fact, the day that I became a citizen is the day that George W. Bush was elected to his second term in office.

I don’t know why I didn’t become a citizen earlier, but I do know what pushed me to become one. The policies of George W. Bush were damaging the country that I loved, and I couldn’t make a difference unless I could vote.

My father had the opposite viewpoint. He has been here as long as I have, and he is still not a citizen. With Bush in power, he became ashamed of America, and he started talking about how he never wanted to be a citizen of this country. In fact, he told me this on the day that I became a citizen. I love him, but I felt like punching him.

Today, I have a different feeling. After eight years of watching this country do things that I am not proud of, I have voted — for the first time in my life — for someone who I believe will help make things better. Better not only in terms of policy, but in terms of tone. I look at the things that Obama has done and I am truly hopeful that he can help us get past our troubles over the last eight years and bring us together as a country.

My father feels the same way.