Wait, What Is My Money Being Used For Again?

Via The Plank:

With the quiet dexterity of a pickpocket, the Treasury is restructuring the American banking sector, and so far the public seems either uninterested or unaware. Because the feds put few conditions on what exactly banks should do with their share of the $700 billion bailout, they’re using it to buy up competitors at an alarming rate–with Treasury’s approval. Last week PNC Financial used federal funds to buy National City, and the CEO of Regions Financial, which accepted $3.5 billion, told the Financial Times that “[t]hese funds, while still strengthening our capital base, will enable us to expand lending and step up acquisitions.” Joe Nocera at the New York Times, in a column I cited yesterday, thinks this is a scandal–and, to the extent that it’s not what lawmakers or the public thought they were buying, it is. At the same time, banking experts seem to think that consolidation is precisely what the industry needs to shore up weaknesses. Which is a dodgy way of saying that we’ll get our loans again, but not until the bankers have fattened themselves at the trough. (Meanwhile, notes Dealscape, commercial paper rates remain exceedingly high, proof that banks aren’t getting any more generous with lending out their money.)

Wait, what?

So, let me get this straight, the $700 billion freed up to increase bank liquidity so that they could redistribute credit is now being used instead for them to buy their competitors.

Is Hank Paulson really allowing this?

It’s like handing money to straight to a heroine addict and telling him to go use it to pay for rehab.

This is why, in case you’re curious, that despite the bail-out, my bank is offering new checking accounts with a .25% interest rate (a quarter a month for every $100 dollars you put in the bank) while inflation rates are somewhere around 5%.

God I love losing money for the sake of corporate greed. Not like this isn’t how we got stuck in this situation in the first place or anything.

-Marc-