USA/As economists talk increasingly of recession morphing into depression, it seems only natural that a Troubled Asset Relief Program should be built into something more substantial than a ground-covering sheet of plastic. Enter the Good Bank/Bad Bank model. Many a Wall Street veteran will remember this approach as the answer to the S&L crisis in the 80s. Fewer will recall its use in the 30s when the banking sector toppled like a line of dominoes. And markets are rising this morning, with huge injections of government cash going into Bank of America, and Citigroup preparing for its big split of good and bad assets.

Citigroup’s broad restructuring plan announced this morning is of this tried and tested Good Bank/Bad Bank design. It came with a fresh $8.29 billion fourth-quarter loss, the bank’s fifth straight quarter in the red.

“The history of Good Bank/Bad Bank is surprisingly positive,” said Michael Holland, founder of fund manager Holland & Co. “It worked a couple of decades ago, so I think it’s one of the first steps toward some positive news and the end of this nightmare. We have for the first time in a long time some reason to think positively.”

“The problem is, of course, if you start to get rid of what’s perceived to be noncore assets, who is going to buy them?” Peter Dixon, the UK economist at Commerzbank, asks in London – where they have plenty of experience with state aid for banks.

The idea of the ownership society seems to have come full circle. We can’t get our 401ks and pension funds to make any money in the markets, so we’ll suck up dud assets as taxpayers and put them in a deep freeze in the hope that some day they may be worth something. Why not? It’s worked before.