NOW IT COMES OUT – AT 8:50 A.M. ET:  Some stunning figures about the 2008-9 bailouts of Wall Street have come to light.  Strange, but we didn't have these figures before.  Maybe "don't ask, don't tell" has become the mantra of the mainstream media.

Even pro-free enterprise conservatives have been startled by the sheer amounts involved here.  And they raise profound questions about institutions becoming so big that they can bring down the entire economy.  I don't know if any laws were violated, but none of the bigwigs who got their companies into such distress have done any time, although there have been widespread calls for major investigations.  When you've got clout in Washington, investigations tend to melt away.  From Bloomberg:

Citigroup Inc. (C) and Bank of America Corp. (BAC) were the reigning champions of finance in 2006 as home prices peaked, leading the 10 biggest U.S. banks and brokerage firms to their best year ever with $104 billion of profits.

By 2008, the housing market’s collapse forced those companies to take more than six times as much, $669 billion, in emergency loans from the U.S. Federal Reserve. The loans dwarfed the $160 billion in public bailouts the top 10 got from the U.S. Treasury, yet until now the full amounts have remained secret.

Fed Chairman Ben S. Bernanke’s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress.

“These are all whopping numbers,” said Robert Litan, a former Justice Department official who in the 1990s served on a commission probing the causes of the savings and loan crisis. “You’re talking about the aristocracy of American finance going down the tubes without the federal money.” 

COMMENT:  I think they call this corporate welfare.  Some may even call it a steppingstone to socialism.  But everyone should call it an outrage.  It is true that the government has gotten back most, if not all, of the bailout money.  But we should be asking the hard questions about how "private" firms with so much sway over the economy got into such trouble.  We should make sure it doesn't happen again.  But we won't.

August 22, 2011