In a stunningly stupid move, the FDIC, led by Sheila Blair, has recommended the assessment of a one time 20 basis point fee on bank deposits. It will use this to pay for its projected $80 billion in bank failures for 2008 through 2013....
Why weaken the strong banks, who will either lose capital through this, or just pass the costs in the form of lower yields to consumers?....
Should all banks have to pay the price? Think of the bank that is muddling its way through this Great Recession. It gets hit with this fee and teeters a bit more. The government is not going to fund it, because it’s not a monolith that will cause armageddon upon failure. What happens?
One more time, from the previous post, here are the new rules in effect:
- If someone makes bad economic decisions, he prospers -- that is, he goes to Congress with a tin cup, on bended knee, and goes home with a few billion dollars in his pocket.
- If someone makes good economic decisions, he suffers -- that is, he is forced to subsidize prodigal businessmen and imprudent mortgage defaulters.
For over a hundred years, progressives and liberals have been chafing for the chance to run things and make the world perfect, chucking little pellets of cosmic justice like Pez dispensers as they traipse about, wreaking all the change we can possibly believe in.
Well, it's change, alright. I'll be grieving in it.