Fascist/Socialist Second-Handers Compete for Government-Appropriated Wealth*

Sometimes, a headline says everything you need to know: “Companies start competing for bailout money.” Of course they are, just like they’ve been competing for government-guaranteed loans for the last few decades and why we’ve seen ads for zero-down, interest-only, ARM loans for people with no credit. It all derives from the same basic source: government intervention into the market.

What I find most ominous about this particular article, however, is this:

The Financial Services Roundtable wrote Treasury officials on Friday requesting that the initiative to buy $250 billion in bank stock grow to cover insurers, auto companies, securities dealers and U.S. subsidiaries of foreign companies, including banks. The Treasury’s plan is intended to bolster banks’ tattered balance sheets and get them to resume making loans.

True enough, the article does go on to say:

As the Treasury now interprets it, these additional groups would not participate in the bank stock program. They could receive help from a separate part of the $700 billion rescue that will buy bad assets from financial institutions.

However, the key words there are “As the treasury now interprets it…” I imagine it would take only a bit of pressure to make Treasury consider otherwise. And once it does, we’ll see the semi-nationalization of more than just the financial services market.

Which is entirely predictable, of course.

* Note: It’s a complex question as to the status of businesspeople who participate in a mixed economy. Some are certainly the “fascist/socialist second-handers” I mention in my headline, for example those who lobby for ever-increasing government controls (to give them advantages over competitors). There are those, however, who are honest and genuinely productive, who either speak out against government intervention (the truly virtuous) or who at least remain silent, and who do not work to expand government’s role but suffer along with everyone else. It would be patently unfair to lump them in, and that’s certainly not my intention here.

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