Does anyone out there remember TARP? The first of the mega-bailouts to Wall Street, which started with President Bush. Boy, that sames like eons ago, but it was just three years ago (2008) and approximately two-trillion dollars if we include QE1 and QE2. (I believe that we will definitely have a OE2, no later than the end of 2011.)
Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program, said in testimony before the Senate Banking Committee, that federal rescue of the financial system in 2008 has provided large financial institutions with an unfair advantage in the form of cheaper access to credit. Also, he stated, "For executives at such institutions, the government safety net provides the motivation to take greater risks than they otherwise would in search of ever-greater profits." He, also, stated that effective government subsidy enables big profits and allows the largest institutions to become even larger relative to the economy while materially disadvantaging smaller banks. (So much for a market economy. This is why I have always opposed mega-mergers and/or special government bail-outs, because it simply reduces competition.)
Thank you, Mr. Barofsky, for your candor at speaking the truth. Now, let's see what Congress will do with it. Of course, I already know the answer. They will do absolutely nothing!
For the full article, read it here.
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