Will anyone in Washington have the courage to stand up and say "Enough is enough?"
That's what I'm left wondering when I read stories like this one, entitled "Bailout scope limited to ... virtually anything." Here's an excerpt ...
"As the list of ailing companies seeking government help grows, it is anybody's guess where the Treasury Department's largesse will stop.
"The $700 billion bailout bill is so vague that virtually any U.S. company could be eligible for government help.
"While the capital infusions announced this month will be directed only to banks, Treasury spokeswoman Brookly McLaughlin confirmed the law allows the department to create other rescue programs "open to a broader set of financial institutions."
"As the bill is written, "financial institutions" don't have to be banks or financial entities. In theory, any company could declare itself a financial institution and ask Treasury to grant it temporary aid if its rescue is deemed "necessary to promote financial market stability."
Critics said Congress should have set a clearer definition for the kinds of companies that could be rescued.
"Talk about the barn doors being left open — it's like they left off the walls and roof, too," said Bert Ely, an independent banking consultant. He suggested that under the bill, an airline could transfer future revenue streams into a subsidiary and ask the government to buy shares in that new "financial institution."
"The only limit to what Treasury could do, Ely said, is the bill's $700 billion ceiling.
"Representatives of the auto, insurance and other industries are already seeking government help, indicating they think they qualify because of their financing units. But McLaughlin's statement suggests that even companies without financing operations could qualify as well.
"No company outside of banking, insurance or auto manufacturing has yet said it will ask for aid from the bailout. But airlines and home builders are lobbying for government help to prop them up through the economic downturn — either under the bailout bill or some other legislation.
"And if insurance and auto lobbyists succeed in their efforts to tap the bailout money, experts said other industries would probably follow."
Frankly, this is getting patently ridiculous, as I warned that it might. The resources of this country are not unlimited. Capitalism only works when you allow failures to occur. Flushing hundreds of billions of dollars down the toilet to support every Johnny Come Lately bank, insurer, investment bank, auto maker, home builder, investor, and foreign country that made bad decisions just doesn't make sense.
I'm not even talking about the outrageous fact that our taxpayer money is going in the front doors at the nation's banks, then right out the back to shareholders as dividends. Or that our taxpayer dollars are supporting Wall Street firms that are simultaneously poised to pay out billions and billions of dollars in bonuses. I'm talking about the extremely troubling notion that core economic principles in this country are being thrown out the window.
"As the list of ailing companies seeking government help grows, it is anybody's guess where the Treasury Department's largesse will stop.
"The $700 billion bailout bill is so vague that virtually any U.S. company could be eligible for government help.
"While the capital infusions announced this month will be directed only to banks, Treasury spokeswoman Brookly McLaughlin confirmed the law allows the department to create other rescue programs "open to a broader set of financial institutions."
"As the bill is written, "financial institutions" don't have to be banks or financial entities. In theory, any company could declare itself a financial institution and ask Treasury to grant it temporary aid if its rescue is deemed "necessary to promote financial market stability."
Critics said Congress should have set a clearer definition for the kinds of companies that could be rescued.
"Talk about the barn doors being left open — it's like they left off the walls and roof, too," said Bert Ely, an independent banking consultant. He suggested that under the bill, an airline could transfer future revenue streams into a subsidiary and ask the government to buy shares in that new "financial institution."
"The only limit to what Treasury could do, Ely said, is the bill's $700 billion ceiling.
"Representatives of the auto, insurance and other industries are already seeking government help, indicating they think they qualify because of their financing units. But McLaughlin's statement suggests that even companies without financing operations could qualify as well.
"No company outside of banking, insurance or auto manufacturing has yet said it will ask for aid from the bailout. But airlines and home builders are lobbying for government help to prop them up through the economic downturn — either under the bailout bill or some other legislation.
"And if insurance and auto lobbyists succeed in their efforts to tap the bailout money, experts said other industries would probably follow."
Frankly, this is getting patently ridiculous, as I warned that it might. The resources of this country are not unlimited. Capitalism only works when you allow failures to occur. Flushing hundreds of billions of dollars down the toilet to support every Johnny Come Lately bank, insurer, investment bank, auto maker, home builder, investor, and foreign country that made bad decisions just doesn't make sense.
I'm not even talking about the outrageous fact that our taxpayer money is going in the front doors at the nation's banks, then right out the back to shareholders as dividends. Or that our taxpayer dollars are supporting Wall Street firms that are simultaneously poised to pay out billions and billions of dollars in bonuses. I'm talking about the extremely troubling notion that core economic principles in this country are being thrown out the window.
posted by Mike Larson at
4:31 PM
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