Thursday, October 30, 2008

Robbed Blind

Remember the reason the banks got the bailout? That the banks needed it to continue lending to "Main Street America?" That they were too big to fail? Well apparently, too big just isn't big enough, because a lot of that bailout money will be going to help mergers, not to improve the credit market:

In his column on Saturday, The Times’s Joe Nocera told about a conference call that he had listened in on recently between employees and executives of JPMorgan Chase. Asked how an infusion of $25 billion of bailout funds would change the bank’s lending policy, an executive said the money would be used to buy other banks.

“I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way,” the executive said. He added that the money could also be used as a backstop in case “recession turns into depression or what happens in the future.”

There was not a word about lending — not to businesses or home buyers or car buyers or students or other consumers. Just the opposite. In response to another question, the executive said that the bank expected to continue to tighten credit.
Once again, one has to marvel at the chutzpah of our betters.