I don't know why the government is so intent on protecting our banking system. This is in spite of the predatory actions of some of the largest banks. Here's an example: the government gives billions in TARP money, and then banks immediately turn around and gouge their own credit card customers. They have raised interest rates on customers with good credit who have never had a late payment. This used to be called "loan sharking"; now it's called "credit management".
The Federal Reserve has passed new rules governing credit card practices. But these practices don't take effect until July 2010. I'd like to know, why the wait? Let's see: if banks are in trouble because their business models are fradulent, let's immediately give them billions in a bailout. Yet if credit card consumers are getting abused, let's let them wait a year or so.
These companies wouldn't be in business if it wasn't for the bailout. It defeats the purpose of capitalism if you let companies make profits in good economic times, but then you bail them out during bad times.
Bank of America is one of the worst examples. I have known several people who have worked for Bank of America or worked for a competitor, and they all say the same thing: Bank of America is an unethical, fradulent company. By all rights this company should be out of business right now. They made their money selling exploding mortgages and with other deceptive business practices. Why are we giving taxpayer money to this company? They are a drain on society, not a benefit to.
The media would make us believe that letting this company go out of business would be catastrophic. It wouldn't. Bank of America is nothing. If they go out of business, the world will continue on. Most of the employees will get jobs with other banks. Further, many of the employees they have hired were due to the growth from their fradulent practices. If someone who was selling ARM mortgages loses their job, it's tough to feel bad. The job shouldn't have been there in the first place because nothing of value was being produced or sold.
