An excellent summary detailing in plain language what has been wrong with the bailouts of banks and Wall Street, posted today at Jesse's Cafe Americain. Here is the link.
02 NOVEMBER 2009
Ten Things Not to Like About the US Government Policy Actions Known as "The Bailouts"
Malcolm McMichael
1. The Treasury and the Fed rewarded some aggressive risk takers and failing business models at the expense of those who followed sound business practices. Those who followed conservative practices have been penalized twice; first on the way up and again on the way down. Those companies that did fail appear to have been 'targeted' by insiders.
2. Much of the process was done in secret with minimal transparency, debate, or disclosure by people who have obvious conflicts of interest.
3. The stated objectives of freeing up credit for the real economy and stemming foreclosures have not been achieved.
4. Trillions in taxpayer monies were provided with few strings attached and at minimal stipulated rates of return. Furthermore, several of these institutions are using their taxpayer money to lobby against reform and award themselves pre-crisis salaries and record bonuses.
5. Bailout actions were arbitrary, inconsistent, ad hoc, and without any apparent guiding principles of justice.
6. The banking, rating, “insurance," and regulatory systems have not been reformed and the perpetrators of the collapse and their enablers remain in charge, now overseeing the “recovery.”
7. Criminal investigations are minimal; few people are facing indictments or even serious regulatory scrutiny for actions that are highly questionable. Official finds are whitewashes.
8. Regulations, regulatory structures, and other safeguards were implemented, revised or swept aside in chaotic and reckless fashion. [discount window participation and collateral, short selling rules, bank holding companies, mark-to-market]
9. The insider advantages, speculative excess, and extreme leveraging of the perpetrators has been allowed to continue; in fact, allowed to expand. There is a taint of insider trading and corruption that permeates the process.
10. Wall Street is bailed out; Main Street is not. Efforts to subsidize the incomes and balance sheets of failing firms have been massive and were implemented with minimal debate, requirements, or oversight; efforts to shore up taxpayer incomes and balance sheets have been comparatively minimal, subject to extensive debate and tinkering, highly selective, and incomplete.
