#922 Red Econ

I’m not sure this whole economic bailout thing is working. And I know a lot of banks think so. Especially the ones who aren’t getting a piece of the bailout security blanket.
Part of it is in the name—the Troubled Asset Relief Program. The acronym has been made much of—TARP. Not a very good name. Usually associated with ugly blue plastic things that are supposed to protect from the harsh elements, but rarely do.
One stiff wind (of economic reality perhaps) and over it blows, revealing, and making vulnerable, all and sundry.
Then you got its non-specificity for the task. A tarp is a catchall solution. An attempt to make one-size-fit-all that fits none. Throwing money at the banks doesn’t seem to be working.
As an example, I just got a flyer from WaMu the other day.
You remember WaMu, seized by the feds, sold to JP Morgan for a pittance, after all its stock was lost, along with countless trust funds and retirements. Now that same WaMu is offering $100 cash to anyone who opens an account. With very few restrictions.
I read the fine print, and if you open a checking account with $100, after 12 weeks they’ll give you $100. Sounds like one of those investment schemes devised by Bernie Madoff.
Hope they keep getting new depositors. Or it looks to me like they’re going to have some troubled assets pretty soon.
There’s just something non-inspirational about a tarp. I guess it’s because it sounds like the ultimate redneck solution. How to beautify your yard. Gotta car wreck in it? Throw a tarp over it. Gotta gaping whole in it? Throw a tarp over it. Big bloody mess where the fox got into the henhouse? Throw a tarp over it.
Redneck economics. Don’t fix it. Cover it up.
But there’s something more insidious about it too. Because the treasury secretary suddenly has all this power to choose. One man can make a financial institution survive or fail. Like a Commissar of Commerce.
Sounds suspiciously like a certain soviet solution. So maybe it’s not redneck economics. Maybe it’s red economics...
Was Marx right? Is capitalism in its dying throes vomiting up communism? Does TARP really stand for Triumphant Achievement of Red Politics?
America, ya gotta love it.