Wednesday, November 12, 2008

Loot, Baby, Loot

Aztec didn't understand my outrage at the bailout. I responded to his comment with my own comment, but here is another article that really captures the dynamic that has emerged. A choice paragraph concerning lobbying for the a piece of the bailout pie...

"Unfortunately, I don't have a lot of good news for them individually,"
said Jeb Mason, who as the Treasury's liaison to the business community is the
first port-of-call for lobbyists. "The government shouldn't be in the business
of picking winners and losers among industries." Mason, 32, a lanky
Texan in black cowboy boots who once worked in the White House for Karl Rove,
shook his head over the dozens of phone calls and e-mail messages he gets every
week. "I was telling a friend, 'this must have been how the Politburo felt,' "
he said.

As bad as the original bailout plan was, this torrid scramble for money is even worse. AIG lives. Lehman dies. Is there any law, regulation, or other documented reasoning that led to this decision? No. It was the largely the whim of Bernanke, Paulson and friends. Is there any quantitative basis for the relative amounts of money that have been handed out under the TARP? No. Is any of this actually constitutional? No, probably not.

So now we have a herd of corporate pigs kicking, biting, and scratching to get at the government trough. What are the odds that the money will be doled in a way that is efficient and sensible? Zero. There will be winners and losers, and fundamental merit will have little bearing in discerning between.

Anyone interested in the long-term functioning of the U.S. as a Constitutional democracy should be concerned.


Al Powell said...

Nice that we have another Karl Rove political hack in this position.

It's my understanding that, in Treasury's mind, the difference between AIG and Lehman was that they considered AIG to be sufficiently "systemic" in nature to bail-out (mainly due to massive CDS exposure), while Lehman did not pass that test. While they weren't transparent about it at all, they have stated that as a guiding philosophy. That's why I ask, are car companies "systemic" in nature?

I am going to convert myself into a bank holding company and get in line. I only need $30-40 mil. I'll make do with only a fractional jet ownership.

Restless Native said...

The difference between AIG and Lehman Bros is that Goldman was $2O billion dollars exposed to AIG and Lehman was a competitor. I don't normally buy into conspiracy theories - I think we actually did land a man on the moon, I think Oswald shot JFK, etc - but when the conspiracy is as brash as this one is, and it slaps you in the face after taking your pearl of great price, I think it passes from the realm of theory into the realm of fact.

Paulson bailed out his buddies, full stop. GammaBoy is 100% on target with his loathing of this bailout, I am just glad it was the Bush Administration that engineered it and not a Dem. If there was any doubt before, I think the long term ramifications of TARP, et al will cement Bush's place in the pantheon of bad leaders. Probably north of Hitler but south of Nero.


Yo Gabba Gabba said...

I've heard the Goldman conspiracy raised by several people who "are in the know." To paraphrase JFK the movie..."Sure a lotta smoke there, boss." "Yeah, but where there is that much smoke, there usually is a fire." say it with a Costner-esque southern drawl, and you'll come off much better. When someone challenges you with an alternate story, say, "Sheeit, that dog don't hunt." Seriously, I gotta think the ties to Goldman are what doomed Lehman.