The New York Times demands a two stroke penalty on TARP (The Act Rewarding Plutocrats). Gretchen Morgenson reports:
While the government still declines to say exactly how it has spent your funds, or who all the beneficiaries are, Mr. Paulson conceded that his huge capital injection hasn’t persuaded banks to lend more money.
Michael Lewis has some more tips before Paulson tees off on the next round of disbursement.
- Embrace rent-seeking. The main qualification for assistance is past incompetence. Instead, give the bailout money to friends, family and struggling authors. So they’re not bankers, you protest. But they haven’t yet been given a chance to prove their financial idiocy. Once they fail, they’ll then have just as much experience as current bankers. GM, Ford and Chrysler have completely mis-framed their appeal for a bailout. Who says they have to make cars? Why not turn the big three into the big lending tree?
- At least give the money away to people who won’t present themselves as obstacles to innovation. Sez Lewis, “By giving money to bankers who have made many stupid loans you have made life harder for bankers who have never made stupid loans. By aiding the dumb banks you prevent the smart ones from replacing them.”