Here’s your “no sh*t” moment of the day. The TARP “watchdog” says that the bailouts have made “too big to fail” part of public policy:
The watchdog for the Troubled Asset Relief Program (TARP) issued its final verdict on the bailouts Wednesday in a mixed report that credited the program with stabilizing the economy but warned that a “too big to fail” mentality might persist.
But the group noted that the extraordinary intervention might have ingrained a “too big to fail” mentality in the financial markets, and perhaps in corporate America.
“By protecting very large banks from insolvency and collapse, the TARP also created moral hazard: Very large financial institutions may now rationally decide to take inflated risks because they expect that, if their gamble fails, taxpayers will bear the loss,” the report stated, adding that government efforts to save domestic auto manufacturers might have spread that hazard to non-financial institutions as well.
“The implication being that any company in America can receive a government backstop, so long as its collapse would cost enough jobs or deal enough economic damage,” the report stated.
Of course, they also claim the bailout was crucil to ensuring stability. Well, when you’re giving out taxpayer money to institutions that made poor decisions and would have otherwise failed, I’m sure they were relieved. But when the next economic troubles happen - whether it’s financial institutions or an auto industry producing cars no one wants, bailouts will be the policy of whatever administration is in power and Congress.
NBC Nightly News focusses on Ohio Rep. Dennis Kucinich’s efforts to find out where TARP money handed out to struggling banks ended up.
NOTE: There’s some subtle humor in this video when NBC uses Jay-Z’s song “Big Pimpin’” as background music when talking about Dubai.
On Fox News Dennis Kucinich discusses the use of bailout dollars by banks.
NOTE: Dennis Kucinich, who supported the stimulus bill and obviously isn’t opposed to government bailouts on ideological levels, opposed the bailout back in September because he viewed it as little more than corporate welfare. It appears that he has been vindicated.
Here’s a short clipshow of President-elect Obama’s excellent economic speech. I really like his candor about the deficit (which has been talked around for years) and his channelling Franklin Delano Roosevelt’s famous line about “fear itself.” Huffington Post has the text of the entire speech.
I think Time Magazine is a little pre-emptive in picking Obama as the person of the year. He hasn’t done anything yet. The criteria is as follows:
“The Person of the Year” is the person who most affected the news for better or worse.” They say the selection generates much debate among Time staffers but they all agree that the award is “not an honor.”
“It’s neutral,” said Richard Stengel, TIME’s Managing Editor. “It is a recognition of somebody’s affect on the world.”
I guess I’m looking for more substance than the rhetoric of “Hope and Change” which is all we currently have. I’d start by looking at Wikipedia’s 2008 for an alternative. I’m all for Obama being Time’s person of the year after he’s achieved something.
This speech by Ron Paul in the House against the proposed auto industry bailout is delivered with the Congressman’s usual razor-sharp edge to almost devastating effect, putting the whole issue into a larger perspective that is so seldom heard in Washington, or in the press and other media. It really speaks for itself, as little more needs to be said. Were that there were more in Congress like Dr. Paul.
In the Reason.tv talk show this month, which is hosted by Reason head honcho Nick Gillespie along with three other libertarian bona fides, four intelligent guys got together and basically said nothing. While they start off by talking about issues of substance like Obama’s election and the continued bailouts, they degenerate into a ten-minute discussion of who’s a real libertarian and which think tank is secretly libertarian.