Wanna buy some toxic waste?

Just when I think I have heard it all, they come up with something even more eye-poppingly incredible. Step right up, folks! First they sucked you into the dot-com boom, before wiping out your tech stocks. Next they urged you to buy houses with money you couldn't pay back, so you could watch those houses and your 401Ks plunge in value.

Now, in like some giant financial reusable energy experiment, they want to give you the once-in-a-lifetime opportunity to buy the very toxic waste produced by the decimation your net worth. And if you have a job in state government, your pension fund may be enticed into this financial sludge as well.

It's all about spin, see? (Isn't it always?) In order to try to get public support for the $1 trillion plan to use taxpayer loans and loss guarantees to further enrich hedge fund billionaires, they're going to create mutual funds that will let you, the poor taxpayer who committed $12.8 trillion to bail out the world's financial system, get some of your money back by going in on these sweet toxic waste deals right along with PIMCO's Bill Gross. As if you and the world's largest bond fund manager were old fraternity brothers or something, as opposed to you just being someone who must bear the full brunt of his or her horrible investment decisions, while Gross is someone who gets to buy discounted government bonds and then "advise" the U.S. to bail him out for the good of the global financial system.

If the the latest plan by carney Tim Geithner and crew sounds too good to be true, that's because it is. As I have pointed out, there are six fundamental flaws with the toxic waste plan. Now you can add to those two more:

1. Private investors' fear that the U.S. will change the rules on pay to take away their profits.

2. The new accounting rule that lets banks value toxic waste however they please -- thus boosting the price that any investor would have to pay for that toxic waste.

Not that any of that will stop the state pension funds, whose attitude toward risky financial behavior makes average debt-ridden, savings-poor Americans look like Suze Orman. Currently, 59 state pension funds have lost $1.3 trillion since the stock market peaked in October 2007. Now their pension obligations exceed their assets by $237 billion, and from their twisted perspective, a trip to the toxic waste dump could be the only way to make up the difference.

Trust me, if the toxic waste plan ever actually happens, there is a very good chance it will lose money rather than make it. That means this great offer to invest your -- and your state pension fund's -- money in toxic waste will just turn out to be a way to neutralize your opposition to a plan to lose you more money.

If the consequences weren't so sad, it would be hilarious.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book isYou Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing.

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