Regulators rescued hand-picked companies with vocal [campaign supporting] advocates, such as General Motors, or important counterparties, such as AIG. – U.S.News

 

By Hester Peirce at U.S.News

EXCERPTS:

Even Treasury Secretary Tim Geithner acknowledged in the Wall Street Journal earlier this month that the Dodd-Frank Act “will not prevent all future financial crises.” Despite the harm caused by bailouts, during the next crisis, we can expect more of the same.

 

Claims that this was a terrific investment are both premature and misleading. They are premature because the government still holds large stakes in companies like AIG and General Motors, and because more than 300 banks still hold TARP funds. They are misleading because they ignore the fact that taxpayer money was invested when, according to regulators, nobody else was willing to invest.

 

Regulators, faced with another crisis in the future, will look to this precedent of preferential treatment for some and not others set by Secretary Geithner and his colleagues in 2008.

FULL ARTICLE

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