I think Romney’s kind of a d-bag, but… let’s recall that this particular *bailout* by the FDIC is really a bailout by… the banking industry itself, as it’s the banks that pay a portion of their profits (based on total deposits) to the FDIC to capitalize the insurance fund. So, while I agree that Romney’s maneuverings here are sleazy… I’m curious as to why folks care about how the 1% go about screwing each other – here Romney simply outfoxed his Banksters [/quote]
Isn’t FDIC back stopped by Us taxpayers? Doesn’t markets treat FDIC like the arm of the federal govt.? Doesn’t govt./congress appoint FDIC members?
Saying FDIC is separate from taxpayers is about as true as saying that Fannie and Freddie were separate from taxpayers![/quote]
All true, but… this article references a specific point in time. So, the costs of the specific transaction mentioned were not borne by taxpayers, but rather the banks themselves. And this is not made clear by the article. Even in the recent Financial Crisis, the FDIC insurance fund remained solvent by increasing levies on the banks themselves. So, yes, technically the Treasury backs the FDIC insurance fund, but this has little to do with Romney’s shenanigans. And even if the taxpayers were involved… the top 20% of taxpayers pay over 80% of federal taxes so all we’re doing is shifting funds between the uber-wealthy and the reasonably well off. The typical member of the middle class has plenty to be upset about but their tax dollars, by and large, aren’t subsidizing the 1% – it’s the group just below the 1% that takes care of that.
Regarding Fannie and Freddie, yeah, we’re taking losses. That’s the bad news. The good news – and, admittedly, it’s barely good news – is that those mortgages that we now own are going to offset the current losses in the LONG term, albeit in nominal as opposed to real dollars. Don’t get me wrong, it’s still a real loss but it won’t look as bad with the passage of time from the standpoint of real red ink. Not that I’m condoning the takeover of Fannie and Freddie; I’m just sticking to the math.
