Bailouts and Connections

The results of a University of Michigan study on TARP funds found the following:

Banks with strong political connections were more likely to receive bailout money from the government — and more of it — in the past year than those with weaker ties.

But that’s not surprising. Despite claims that such bailouts — more euphemistically referred to as “capital infusions” or “injections of liquidity” — were necessary to save vital financial institutions in order prevent a systemic collapse of our economy, politics, as usual was involved.

The power to take money from taxpayers (either taxed, borrowed or printed) and give it to others is a powerful one. It’s nothing new, and few politicians can resist the temptation. They often mask such confiscation by appealing to lofty-sounding goals like “saving the economy from the brink of collapse,” “saving the planet,” or the even more generic “for the common good.”

The power of wealth redistribution (the more politically sanitary term for forcibly taking money from one person and giving to another) is inherently corrupt. In that sense, these results should not be that surprising.