$335B in bail-out money have been committed by the government to date as part of the so-called TARP program. The NY Times has released an excellent graphic that shows where all this ocean of cash has been flowing.
As you know, I have been an early supporter of the financial industry bail-out, however upon seeing the NY Times graphic, I have to ask myself if this is precisely what was intended. Yes, a lot of the money has gone to bail-out commercial and investment banks, however, if you examine the list of companies that have received bail-out money, you will also find American Express - a credit card company; Hartford Life and Protective Life (protective being my own troubled life insurance company); and now several cities and states have joined the list of beggars for our tax dollars, not to mention the auto industry which has been angling for a nice chuck of change financed by - who else? - the American taxpayer.
What a sham this is turning out to be. The financial industry required saving from complete collapse for the benefit of the entire American economy. The same cannot be said for the life insurance companies, car manufacturers or local governments. Seriously, if my home state of California is $32B in the hole, let us, the residents of California, pony up the cash or else give up some services. If I as a consumer selected a failure of a life insurance company, it was my mistake. I am not expecting the Federal government to guarantee my financial decisions. And auto makers? I have spoken my mind on that farce extensively already.
It should take more than the purchasing of a regional bank to allow for American Express to claim the title, benefits and bail-out money of a so-called "Bank Holding Company". Enough is enough. Not every failing business should be rescued by the government, and not every miserable financial decision needs to be rewarded. A line should be drawn, and the line should pass exactly at the point where the benefit of a bail-out accrues to specific individuals or limited groups, but the financial cost is borne by society at large. Banks needed to be saved so that our economy could avoid a complete melt-down. The logic does not apply to the other institutions standing in line for cash.
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