Scaling The Heights of Stupidity

I should not blog while mad. This is a nerdy rage, though, since I am an indignant economist.

Our Treasury Secretary, Hank Paulson, got $700 Billion to spend buying up toxic securities. He then started buying billions of dollars of bank stock, rather than toxic securities and later announced that he would not buy any toxic securities, which are the root of U. S. financial problems. Few banks were interested in the government buying a share of their ownership. Banks who did not need the money did not wish to appear unsound and did not wish to find later that government string were attached to the money. Most notably, Wells Fargo did not go gently.

Then the treasury department turned the issue around. "Hey, if you're not taking our money you must not be able to meet our criteria, so your depositors better worry about whether you are sound!" So banks started applying for government money.

Now politicians are outraged that many banks who took the money are paying their executives year-end bonuses.

If government goes after these banks for paying bonuses, then government will be revealed as having forced a deceptive, involuntary takeover of banks.

Nerdly steam issues from out my ears.