Monday, August 31, 2009

Ownership society, TARP edition 

Let me be sure I have this right:
  1. Government forces banks to take capital injections. Government gets warrants to buy common stock in the process.
  2. Government tells banks how to operate.
  3. Banks want government out, make an offer to buy their shares and warrants away.
  4. Banks raise private capital, pay off the government.
  5. Government declares victory.
Did I miss anything?

Is this a good thing?

It occurs to me that this "earned a return for the taxpayers" line is becoming the Leviathan equivalent to those annoying "it's for the children" appeals on TV. It obviates any need to really think about what was done in the first place. If earning a return for taxpayers was a criterion for government performance, let's put the whole portfolio up in Morningstar and see how many stars our elected officials earn?

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