Here’s an excellent article by Barry Ritholtz, at The Big Picture, on the Bailout. 
Why Bailouts Attract Handout Seekers
The biggest surprise was how quickly it went from ‘I don’t need this,’ to ‘How do I get in?’
– Michele A. Davis, Treasury Department, head of public affairs.
Exceprt:
A truisim of all bailouts: Enormous amounts of taxpayer cash attracts all manner of unsavory, undeserving characters. What was supposed to be a narrow and limited attempt to reduce the systemic risk of a financial collapse has become a taxpayer funded free-for-all.
Like hyenas trying to steal the kill from a lion, the mere scent of this enormous pile of loot starts attracts the scavengers. They cannot help themselves, for it is their essence, and who they are.
Just as the dreaded 17 year locust devours all before it, so Lobbyists too, are swarming the capital. Never before has a trillion dollars been authorized so quickly. Never before has so much money been spent with so little oversight, controls, or transparency.
Now, on top of the negligent manner in which this money has been thrown about, come the latest jackals drawn in by the scent of easy money.
American Express (AXP) — a credit card company which, last I checked had little or no exposure to mortgages — is now a bank, for the sole purpose of tapping some of that free money. The thinking seems to be, “Big pile-o-cash? Gots to gets me some of that!”
Next pig at the trough is the heinous derivatives hedge fund, formerly-known-as-AIG. They were taken over so quickly, with so little oversight and essentially no due diligence, that the price tag on this has already doubled. What no one at the NY Fed is likely to tell you anytime soon is that this price tag is very likely to double yet again.
Here’s a forecast: After the eventual investigation and audit at Maiden Lane, someone will go to jail. (You read it here first).
And now, along comes General Motors. They are unique corporate citizens, demonstrating a shocking incompetence in not one but two entirely separate industries. They have shown an unsurprising inability to manage a finance company (GMAC), and a remarkable incapacity to run an automobile company (GM). And, like AMEX, they smell blood in the water…
…Last month, I suggested the bailout plan might cost as much as 3 trillion dollars. At the presnt rate, this will scale up to 8-10 trillion dollars before long. We could even end up spending a full year’s GDP before its all said and done.
Unregulated, Free market capitalism, anyone?
Full article here.
