14 January 2009

Bailout Baloney

As I have said before I do hate bailing out the big banks (in my fantasy world I would like to see them crumble), however in the real world I know that it was necessary to save the worldwide economy from possible collapse. What I don't like is how it was gone about in the United States, take Gordon Brown for example, he bailed out the major players in Britain very swiftly and got a far better deal for the taxpayers in Britain then the Bush administration managed to get in the US. For example the government actually put some members on the boards of these banks, the UK government gets a 12% return in dividends, compared to Bush getting only 5% (pitiful), also Brown had REAL oversight, regulation, and transparency where Bush's oversight, transparency, and regulation was laughable.

What should really make your blood boil is the hidden legislation that acted as a massive windfall for the banks in the form of tax breaks for massive mergers, this is a piece of controversial legislation (tax code) which the banks have been pushing for years but have not been able to put through in normal times, however when the crisis hits it gets shoved through the back door as the initial 700 billion is taking all the attention through the front door, this was a major unlawful change to our tax code which wasn't even put to vote in congress (who found out about it in the NY Times) as it should have been. What is worth pointing out is that these banks because of this change in tax code were able to acquire other banks at zero cost and sometimes even a multi-billion dollar profit, when in reality they should have ben paying billions in taxes.

What is truly disgusting about this is that the whole reason we have had these massive bailouts is that these banks are perceived as too big to collapse, well what do you think is going to happen when we have legislation going through making it easier for the big banks to buy up all the small banks (for free? at a profit?), in the long run we will end up with only a few banks which are astronomically huge and they will never be allowed to fail based on the fear that if they collapse the world as we know it will end.

It is very ironic that the Bush administration started the presidency off by feverishly taking public money and putting into private hands and now at the end they are taking the private debt and putting into the taxpayers hands, thanks a lot!

Of course a bailout was essential, its the details and the substance of the bailout that is ludicrous.

You don't have to agree with me but that is my strong opinion which I can back up with sources.