Banks To Use Bailout Money For Personal Gain

I was generally supportive of the government's effort to stabilize banks until this $700 billion scheme announced by Paulson and passed by a Congress. Congress may have added measures to the plan that included some modicum of oversight but their supposed victory is a little like Neville Chamberlain's policies of appeasement. In other words, their claim of victory for Americans is pathetic.

Now we have an executive finally stating the obvious - banks don't plan to use that money to help the economy. They plan to help themselves. And, to do so partly by increasing the systemic risks in the economy by trying to grow even larger. In other words, this money was given to banks that were completely incompetent. And, that has given them a reprieve to further cripple stronger banks that used proper risk management. That will further erode the health of the entire banking system. As I wrote a week or two ago, the government is weakening the entire industry with its actions. These large institutions need to be nationalized and broken up or allowed to fail.