The New Bailout

[sugarpop]

Originally Posted by Zhuge Liang

It could just be me, but I find the bailouts quite refreshing. Its not every day your suspicions about incipient banana republicanism are proved true, after all.

For example

AIG renegotiation

The Treasury banking stress tests were fixed

White House again refuses calls to nationalize the banks, maintaining what is essentially a pretty fiction

Structural reform of the banking system is essentially nil

And these are just a few stories from the last week.

Now, that's not to say bailouts in theory are a bad idea. With the right structural reforms, proper analysis and adequate punishment for the fools in government, regulation and finance, bailouts could work. There are plenty of good bankers and financial analysts out there who did not jump on the subprime mortgage bandwagon, and have raised concerns about overreliance on credit before now.

But none of those things are happening. Its the "in practice" part of this which is the problem, as per usual. This is like trying to fill a bucket with a hole in the bottom. But then, when the bucket contributed several million in campaign related funds, and those who the money is being taken from contributed, uh, significantly less, you shouldn't really be surprised when the result is systemized looting from the former to the latter.

I never agreed with the bank bailouts. I DO agree with the stimulus. AIG just makes me see red. I think they should just go down, along with some big banks. In fact, I think too many corporations have gotten too big. They should be broken up.