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Of course economics is not a zero sum game and of course properly functioning financial institutions increase the size of the pie. Zombie banks do not, and the government’s guarantees inevitably, if slowly, turn the useful financial intermediaries into parasites. Why should government supported banks be any better than government supported health care? Aren’t Fannie Mae and Freddie Mac sufficient proof of the disaster of government involvement in the financial sector? A half a trillion likely down the rathole on that one, with nothing left but mansions and offshore accounts for the Demoncrat bureaucrats. It’s not just about the bankers.

If you really care about a Free Republic, you don’t go urging the government to make “smart trades”. The pages of history are littered with the tax-sucking holes that result from the government’s “smart trades”. They always look smart at first, and then turn into a rathole after the current crop of apparatchiks have skimmed off their pieces and gone away.

Why should government supported banks be any better than government supported health care? Aren’t Fannie Mae and Freddie Mac sufficient proof of the disaster of government involvement in the financial sector? A half a trillion likely down the rathole on that one, with nothing left but mansions and offshore accounts for the Demoncrat bureaucrats. It’s not just about the bankers.

LINK: Barofsky also said his office is investigating 77 cases of possible criminal and civil fraud, including crimes of tax evasion, insider trading, mortgage lending and payment collection, false statements and public corruption. One case concerns apparent self-dealing by one of the private fund managers Treasury picked to buy bad assets from banks at discounted prices. A portfolio manager at the firm apparently sold a bond out of a private fund, then repurchased it at a higher price for a government-backed fund. A rating agency had just downgraded the bond, so it likely was worth less, not more, when the government fund bought it. The company is not being named pending the outcome of Barofsky's investigation.

And why is it OK for small businesses to go broke while megabanks get bailouts? When government picks winners and losers, I wonder if anything could go wrong :)

They always look smart at first, and then turn into a rathole after the current crop of apparatchiks have skimmed off their pieces and gone away.

If a newly elected congressman can lose his soul to Washington corruption (some don't have one to start with), what happens to a bank when Washington dumps a truckload of money on it?

I anticipate one of the megabank sycophants to reply "we haven't lost a dime to the TARP..." That contradicts what Geithner said. And even if all of it were repaid, it goes back to the TARP fund, not to reduce the debt.