More Meaningless “Guarantees”

March 5, 2010

Question — if the federal government guaranteed you they would replace your money if you lost it all through casino gambling or investments, but could keep any profits, what would you do today? Probable answer — beg, borrow and “steal” as much money as you could and head to the appropriate betting window. Read on.

This is basically what the government has been doing for more than a hundred years, and is still doing today. Only they’re not doing it for individuals — they’re doing it for banks. And there’s absolutely no indication it’s going to change; not even from the so-called anti-Wall Street President or Democrats in Congress.

Herbert M. Allison Jr., assistant Treasury secretary under Wall Street’s man Tim Geithner (and an ex-Merrill Lynch man), faced a congressional panel yesterday to answer questions on this matter (as well as other matters). Allison said there was no blanket guarantee that “too big to fail” institutions would be saved by taxpayers. Oh, really!!!!!!! Well, Mr. Allison, there’s never been a “guarantee” —— but there’s always been a “no-guarantee, wink-wink”.

Last year President Obama assured the biggest financial firms on Wall Street that he would not let them fail. That kind of assurance (and delivery) has been going on since 1907. But just as demonstrated since then, once the crisis is resolved at taxpayer’s expense, we commoners get “assurances” from those same people that it will never happen again. Only the assurance to the taxpayer’s is never delivered.

Just as suggested in the opening paragraph, bankers who have judged themselves too big to fail will continue to beg, borrow, and steal all the money they can and gamble it away as long as they believe the government will bail them out. And that won’t change until they’re allowed to fail. However, as long as the country is in the precarious situation we’re in today, we will never allow that, no matter what (or who’s in charge).

Did you ever wonder why people in certain positions continue to say “the debt doesn’t matter”? Well, here’s one reason. If we weren’t in debt up to our hairline we wouldn’t have to worry about “too big to fail” firms. We could just let them crash and burn.