House of Eratosthenes

Failure. Universally available, and free. No person, enterprise or industry is “Too Big To Fail” — ever. Failure is regarded as something that is always possible, to be avoided at all costs, but never to be ignored or sidestepped once it is earned. Depriving a man of the failure he has justly earned, is rightfully seen as just as deplorable as depriving him of wages he has justly earned.

Number 4 in my 42 definitions of a strong society. We broke that rule when we bailed out the banks (although, to be fair about it, I only scribbled it down after the events had transpired). Nevertheless, an attribute of a strong society it is, therefore it is an attribute of a weak society to say “Aw, you poor dear…you’re too big to fail…that’s a ‘gimme’ for you.”

So we bailed them out. Now what happens.

Nearly 100 U.S. banks that got bailout funds from the federal government show signs they are in jeopardy of failing.

The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators. The 98 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program.

Financial blogger Mike Shedlock says…

Most of these failures will be relatively small ones. The median TARP infusion for the 98 banks was $10 million. The grand total of the 98 banks was about $4.2 billion. In contrast the first 8 large recipients received a total of $125 billion, now repaid.

Commercial real estate loans gone sour are at the heart of many small bank failures. One consequence of these failures is the too big to fail banks keep getting bigger. [emphasis mine]

Exactly. Any time you throw money at something, you get a lot more tomorrow of whatever it is today.

There is another interesting attribute illuminated for our inspection here, and that is an attribute of Obama apologia. It is an attribute of self-contradiction. The Obama administration’s selling point is one of “change,” as in, a definable and perceptible difference from what came before. But when you criticize Obama for having supported the bank bailout, the knee-jerk response you get back is that you don’t have your facts straight — it’s the guy before Obama who actually got it started.

Our agent of change…is to be defended from attack because He is merely continuing the policies that came before.

Meanwhile, there is very little by way of solid evidence to persuade us that this was some kind of a good idea. If…y’know…you happen to be into that whole thing about evidence & ideas. And I realize that’s going out of style very quickly.

Hat tip to Memeorandum.

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Ninety-Eight TARP Recipient Banks Show Signs of FailingMonday, December 27th, 2010

Ninety-Eight TARP Recipient Banks Show Signs of Failing
Monday, December 27th, 2010