New Treasury Plan: Just as bad as the old one?

Well, we all know what a total cluster**** TARP turned out to be. $350 billion doled out with virtually no strings attached, not even the requirement that banks actually be able to account for the money that they took. Several months later, we learn that banks paid out large bonuses, acquired other banks and financial services companies, and didn't really increase lending at all.

Oops!

Well, the new Treasury plan, hopefully, would have gotten around some of that.

Unfortunately, it doesn't. Rather than giving the government the right to convert the preferred stocks into common shares, the new program seems to actually give banks the right to convert government equity into common shares, opening up the possibility for all sorts of shenanigans.

Of course, I'm not overwhelmingly concerned...the goal of the plan is to recapitalize banks by giving them money after all. I'm increasingly wondering whether there is a point to that strategy anymore, though.