A Congress of Suckers

In which Washington D.C. is shocked, shocked, to learn that greater part of the money that was so desperately needed to save the American banks that were deemed too big to fail actually went to their European counterparts:

Foreign banks were among the biggest beneficiaries of the $3,300bn in emergency credit provided by the Federal Reserve during the crisis, according to new data on the extraordinary efforts of the US authorities to save the global financial system.

The revelation of the scale of overseas lenders’ borrowing underlines the global nature of the turmoil and the crucial role of the Fed as the lender of last resort for the world’s banking sector. However, news that banks such as Barclays of the UK, Switzerland’s UBS and Dexia of Belgium borrowed billions of dollars at favourable terms from US authorities may further anger critics already enraged about the Fed’s rescue of Wall Street….

Barclays was the biggest cumulative borrower from TAF. The UK bank, which bought the US operations of Lehman Brothers out of bankruptcy in September 2008, borrowed a cumulative $232bn from the TAF through various subsidiaries.

It’s interesting to see that nearly four times more money went to the biggest European bank than to the biggest American bank. But as we’ve seen everywhere from Ireland and Iceland to the USA, this is always how the process of structural corruption plays out in a modern “representative democracy”. The legislature forces through a pig-in-a-poke by any means necessary, threatening everything from widespread cannibalism to tanks in the streets if the legislators don’t ignore the protests of the people and obediently “address the crisis”. Then, a few years after the fact, it is learned that the actual purpose of the law was entirely different than the one that was provided in order to push it through the legislature.

I don’t have much sympathy for the people, however. Because it doesn’t matter how many times this happens, they will fall for it just as readily the moment that another crisis is announced and another solution to avert it is presented.