While it seems that most recent diaries on Dkos revolve around Joe Lieberman, or someone's personal tale related to Obama's election, or Prop 8, etc., it seems like the bailout discussion has grown very quiet. However, if the Treasury Department continues what it's doing, you might as well kiss our other spending priorities goodbye.
Hey, I know there have been some Treasury diaries. But not enough. If we can have a million rants about f***ing Joe Lieberman and his goddmamn committee chairmanship, humor me with one more about the trillions of dollars that are starting to disappear into the Treasury vortex.
The Treasury department has completely abandoned its plan of buying troubled bank assets, and instead seems to be spending money like a drunken sailor, throwing money at whatever troubled (or not so troubled) company saunters by in its desperate attempt to revive the economy. Here's the money quote from Michele Davis at the Treasury Department:
"The biggest surprise was how quickly it went from ‘I don’t need this,’ to ‘How do I get in?"
The pigs are lining up at the trough. My particular favorite example is how American Express, a company with no particular mortgage exposure, has reorganized itself as a bank, in order to grab a pile of cash. GMAC, GM's financing arm, is also scambling to reorganize as a bank.
I'll leave GM to the talented Barry Ritholtz of The Big Picture:
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.
They have already managed to wrest $25 billion in taxpayer monies for hybrid technology research. Do you suspect those monies would have been more efficiently spent if it went to MIT and Stanford, and to the many small innovative firms that have pioneered work in this area? Or, is the best way to generate progress in this technology to give it to a bloated, debt ridden, poorly run, dinosaur?
This massive, unprecedented corporate welfare is nothing if not comical (from the NY Times):
The Treasury Department is under siege by an army of hired guns for banks, savings and loan associations and insurers — as well as for improbable candidates like a Hispanic business group representing plumbing and home-heating specialists. That last group wants the Treasury to hire its members as contractors to take care of houses that the government may end up owning through buying distressed mortgages.
Now, don't get me wrong. I know the liquidity crisis is real. And the original plan of just buying the bad loans wasn't going to solve the problem. But if we're really going to recapitalize the banking sector, we might as well buy shares in the banks. Price tag according to Ritholtz: Only about $3 trillion or so.
Consider how far $3 trillion would go towards having an alternative energy economy, universal healthcare, tax relief or rebuilding of infrastructure.
But don't despair, desperate taxpayer! You too can become a have instead of a have not! Just reorganize yourself as a bank.