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More Bailouts After "No More Bailouts"

The opinions expressed by columnists are their own and do not necessarily represent the views of

The President recently visited Arizona in order to take credit for Intel’s new plant. 

Of course he couldn’t find time in his busy schedule to visit the border and witness firsthand the lack of security. 

Oh well, maybe next time. 

However, Obama did have time to mix it up with Arizona Governor Jan Brewer regarding her new book.  Priorities, priorities….

The President’s visit out west reminded me of the statement usually made in the old Cowboys and Indians movies, when the Indian chief says “man speak with forked tongue.” 

I would like to remind the President that he was unequivocal in his State of the Union address when he said “NO MORE BAILOUTS.” 

One day later, his choice for Federal Reserve Chairman, Ben Bernanke, announced that interest rates will stay at 0% to 0.25% until perhaps 2015, and maybe longer. 

If we look below the surface, we’ll notice one of the greatest bailouts ever concocted.  The ability by the bankers to borrow at 0.25% and then take that borrowed money and not lend it out to neither businesses, consumers, nor entrepreneurs, but simply repurchase short-term treasuries. 

The difference can be as much as one-half of 1%.  That doesn’t sound like much to the person who refuses to speculate with their hard-earned savings.  As a matter of fact, 0.5%, if they can even achieve that, is virtually a death knell for retirees. 

However, for a bank that can borrow $20 billion and beyond, 0.5% amounts to $100 million, certainly enough money to continue paying out the huge bank bonuses we have all come to know and love. 

In addition, as the TARP oversight reports are coming to the forefront, we find that AIG and GM continue to owe billions of dollars to the American taxpayer.  In fact, it would appear that TARP (bailout) will become an integral part of the system forever. 

So, it all boils down to this:  Can the carry trade with low costs, high returns, and no risk be considered a bailout? 

Obviously to Obama, the answer is no.  In addition, if corporations continue to owe money and are not required to pay it back, is that a bailout?  Once again, obviously not. 

Didn’t we go through this once before with the debate of what “is” “is?”  I think the old Indian chief definitely got it right when he said “man (President) speak with forked tongue.”

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