(scheduled post warning: author not responsible for stale content or fishy aroma)
The President has given access to his “ideas that stink” generator to Barney Frank and you just know that combination will yield something stupendous.
The concept Frank is working on would be to shield us taxpayers from pouring any more of our tax dollars into the financial institution bailout black hole. Sounds good so far, right? You are probably thinking that Frank is crafting legislation for stricter oversight of these institutions or possibly a tweak to bankruptcy laws that would allow for a softer landing for investors of failed financial institutions. If you thought any of that you would be wrong.
You see, the bailout gravy train is going to continue but the bailouts will be propped up by… wait for it, the other financial institutions.
Under the proposal, future rescues of large institutions would be paid for by other big firms. The proposal says that any financial company with assets of more than $10 billion would have to contribute to the rescue of a failed firm. The legislation emerged after community banks lobbied to ensure that small institutions would not have to pay for future bailouts.
You read that correctly. The outfits that are making money and are on sound financial footing will be forced at the butt of Barney’s gun to fork over cash to their under-performing competition.
In one fell swoop, Barney has simultaneously encouraged further risky behavior by the bad actors in the financial world as he is effectively eliminating the punishment for poor performance and has dis-incentivized strong performance by penalizing it.
We cannot imagine anything actually being more counter-productive to a healthy banking/finance industry.
We’re scouring our thesaurus to come up with language that would adequately describe what a complete ignoramus Frank is and we are failing… miserably.