Wednesday, June 10, 2009

Bailout Blues

We've gone round and round with this bailout thingy.

The Government apparently thinks that by nationalizing everything in sight it can make this country better: banks, cars, health care. The trouble is, that government -- any government -- has never been able to run anything efficiently and at profit. It always runs to waste and abuse and sheer bureaucracy. It needs problems to solve, therefore there will never be an end of problems, if only to justify its existence.

I once heard that Czar Nicholas II actually disbanded his legislative body (the Duma), but sheer bureaucratic inertia prevented it from taking effect: they refused.

The smack to the face of the American way is the government demanding that banks take their bailout money (even the reluctant ones) and then preventing them from paying it back. Despite the massive regulation, these are (still) private institutions that are being directly meddled with by the Treasury.

Because with the money comes power.
[AP] Ten of the nation's largest banks were given the green light Tuesday to repay $68 billion in government bailout money freeing them from restrictions ...

[Bloomberg] Firms buying back the government's preferred shares also have the right to repurchase warrants the treasury holds "at fair market value".
What is left unsaid here is that some banks that didn't pass the government "stress test" will not be allowed to pay back the money even if they wanted to. Does this smack of perpetual servitude or what?

Talk about your fine print: in this case it was fine print that was made up after the deal was struck. My wife is always telling me about (making up) the fine print in our marriage (which I ignore); maybe I should look into it ...
"I am altering the deal. Pray I do not alter it further." -- Darth Vader

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