And So I Go: Yesterday, Today and Tomorrow

>> University of Michigan Study Confirms Link Between Financial Bailout and Corruption

Posted on: December 22, 2009

Big Government » Blog Archive » University of Michigan Study Confirms Link Between Financial Bailout and Corruption

There is a new study from a couple of academics at the University of Michigan, who found significant relationships between lobbying and bailout money, as well as a greater chance of getting bailouts depending on a bank’s ties with either the Federal Reserve or key members of Congress. Hopefully, people across America will draw the obvious conclusion and realize that big government is inherently corrupting, as discussed in this video. Reuters has the details on this latest example of big government and malfeasance:

U.S. banks that spent more money on lobbying were more likely to get government bailout money, according to a study released on Monday. Banks whose executives served on Federal Reserve boards were more likely to receive government bailout funds from the Troubled Asset Relief Program, according to the study from Ran Duchin and Denis Sosyura, professors at the University of Michigan’s Ross School of Business. Banks with headquarters in the district of a U.S. House of Representatives member who serves on a committee or subcommittee relating to TARP also received more funds. Political influence was most helpful for poorly performing banks, the study found. “Political connections play an important role in a firm’s access to capital,” Sosyura, a University of Michigan assistant professor of finance, said in a statement. Banks with an executive who sat on the board of a Federal Reserve Bank were 31 percent more likely to get bailouts through TARP’s Capital Purchase Program, the study showed. Banks with ties to a finance committee member were 26 percent more likely to get capital purchase program funds.

Not a whole lot for me to add to this one folks, except to say I certainly am not at all surprised. Do read the article.

See also:  Banks That Bundled Bad Debt Also Bet Against It – NYTimes.com

BB

2 Responses to ">> University of Michigan Study Confirms Link Between Financial Bailout and Corruption"

Another example of ‘change’ we can’t live with.

Commonsense, The first Bail Out TARP came about under Bush and both presidential candidates McCain and Obama voted for it. Obama nd his tax cheating Sec. of the Treasury Geithner had total control over it however. Then Obama came in with Stimulus Bill and a outrageously huge budget and all the bail outs and buy outs putting the federal government in the automobile business, the insurance business (AIG) and the mortgage business (Fanny and Freddy). All of these naturally administered by the White House President and czars and not the elected officials in congress. And now a costly and totally appalling remake of a good and functioning health care system which will turn over what is now 6% of our economy to Presidential control, but with this bill it will soon be much more of our lives that Washington will have a hand in. BB

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