Thursday, June 11, 2009

Like A Faceful of Seawater

As Hannibal used to say, "I love it when a plan comes together."

The executive-pay restrictions on the bank bailout money seem to have done exactly what they were supposed to do---not so much keep bankers from getting big bonuses on the taxpayer's dime (though that's nice too), but rather to make them really, really *want* to pay the money back. It seems like the Obama team learned one big lesson from the S&L bailout: rich people hate repaying loans.

So the money lets everyone ride out the real-estate valuation crisis, and then gets paid back promptly, with a little profit on top. More loans should work out this well! Rightie outlets are saying the banks were healthy all along, and only took the money because the government forced them, but considering that Hot Air's list of poor, oppressed institutions being forced to play sick for nanny includes epically-dysfunctional Citigroup, I would take those claims with enough salt to preserve beef. Their complaints that the Treasury is holding onto warrants for bank stock---in effect, engaging in stock speculation---strikes me as a feature, not a bug. Instead of just giving away money, the government gets the money back when things calm down; poetically, they get it back thanks to the health of the banks they saved. Again, this is in pleasant contrast to the S&L bailout, where the banks simply collapsed, costing the government truckloads of FDIC money which was pure loss, never, like my hairline, to return.

If conservatives took deficits as seriously as they say they do, they'd regard this as a great success, but then they'd also be cursing Reagan and praising Clinton and we'd all be wearing shoes on our heads and taking bears to church, so... nevermind.

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