The Washington Post must be shooting for the Pulitzer for incredibly bad reporting. How else can one explain an article on plans for bailing out the banks that never once conveys the basic fact to readers that many, if not most, of our banks are in fact bankrupt. Instead the article uses euphemisms to conceal this fact. For example, it tells readers that the scope of the toxic asset "problem" has reached $2 trillion. What does this information tell readers. Do the people reading this article know that this sum vastly exceeds the capital of the banking system? That seems unlikely. So most readers would not know that the Robert Rubins of the world are sitting on bankrupt banks. In other words, they would be shut down and put out of business if we let the market run its course. Instead the Obama administration is looking to hand taxpayer dollars to the banks through a variety of complex mechanisms. The main reason for using complex mechanisms (rather than simply seizing bankrupt institutions) seems to be to conceal the fact that we are handing taxpayer dollars to bank shareholders and the wealthy executives who run them. The Post is obviously eager to assist in this effort. At one point, it even is so polite to tell us that the administration doesn't want to limit executive compensation as part of getting welfare from taxpayers because "officials" are worried that such limits would discourage banks from participating. Isn't it neat how the people who work in the Obama administration don't have names. Are they called "official 1," "official 2" etc.? Since "officials" are not always entirely truthful in what they tell reporters, it is important for readers to know who made such claims. Who cares if some banks don't participate in getting handouts? Citibank, Bank of America, and many other major banks have no choice. They will go bankrupt without assistance. If some banks actually can get by without the government's assistance, why would we want to force it on them? If their toxic assets have really frozen lending, although not actually jeopardized their solvency, then the shareholders would have a great lawsuit against any bank executive who refused to act in the interest of the shareholders in order to preserve their own high pay. Such instances would presumably be rare, but could nonetheless provide a great source of free entertainment to a nation suffering through a severe downturn. In short, there is good reason to believe that the Obama administration is trying to slip hundreds of billions of dollars to bank shareholders and their top management. The Washington Post seems to be helping.
--Dean Baker
