Bailout Activity Not What Congress Anticipated

The Treasury Department today issued additional documents for publicly traded financial institutions applying for the capital purchase program authorized by the Emergency Economic Stabilization Act. This program is designed to attract broad participation by healthy institutions, to stabilize the financial system and increase lending for the benefit of the U.S. economy and the American people.

After the battle to get this deficit busting bailout passed it has now been used by one institution PNC Financial Services to purchase another bank. So as taxpayers we gain an equity stake in PNC so that that they can expand and help themselves, but not where help is needed or was intended. We can expect to see more of this as congress seeks to help those that keep them in office. Who or what are the taxpayers going to bailout next, I doubt it will have anything to do with mortgage assistance or be remotely connected to the sub-prime mess.

Stockholders in institutions such as PNC are now using taxpayers money to pay dividends to shareholders. So instead of helping to promote new lending by the banks it is going to those who can afford to invest in bank stocks instead of those struggling to pay their mortgages, other bills and just plain survive. So much for the bill of goods given the public when Paulson and Bernanke were trying to sell this plan, rescuing banks and homeowners. The average citizen loses yet once again.

The next thing we will be seeing are other large businesses somehow reconstituting themselves as a bank holding company so that they can get their hands on some of this free cash. Those responsible for safeguarding our financial system and economy are doing just the opposite. Thanks for nothing - Bernanke, Paulson and Congress.