An emergency meeting has been called by a powerful money man to break the good news to his cohorts about more financial help from taxpayers. The meeting opens:
“Thank you all for coming at this short notice. I have great financial news. This news is even better than all the billions or trillions we have received in bailout money of taxpayers' dollars. It has been reported that the government will create a new financial entity with taxpayers' dollars called a 'bad bank.' This bank will buy up all the rotten, lousy, useless paper we called 'derivatives' that we have on our books, so make sure you get rid of all your crap, oops, I mean 'troubled assets.' This means the taxpayers are going to bat for us once again; so take advantage of it. Even though some of us made massive profits and received huge fees for selling these 'derivatives' all over the place, the taxpayers are now going to be owners of the 'bad bank.' Whoever thought that name up is surely right on the money. No pun intended, of course. [Much laughter ensues] And, the way things are going nowadays, perhaps a Nobel Prize for Economics could be in the offing for the inventor of the "bad bank" terminology? But hey, it’s all in the packaging as we all know."
[Some applause takes place and there is more laughter as someone says: “Thank goodness there is a financial Tooth Fairy out there.”]
“Anyway, that’s how we sold all this financial garbage in the first place. We used names like 'super investment vehicles' and 'collaterized debt obligations' and they surely sounded good, even though they turned out to be crap. And this is the type of crap, oops, I mean assets, the taxpayers are now paying for. But hey, where would the taxpayers be without us? After all, we will still be lending them money from their own money and charging them a fee for the service. Now isn’t that good business? But I digress.
“To put the ‘bad bank’ terminology in perspective, here is how I understand it will work. Some of us who have been bailed out by billions or trillions of taxpayers' dollars will now be able to sell our rotten, useless, lousy paper, that nobody in their right mind will buy, to this ‘bad bank.’ This ‘bad bank’ will then give us taxpayers' dollars for our lousy, useless paper. The ‘bad bank’ will then ask investors to sell this rotten, lousy, useless paper called 'derivatives,' and they will receive big fees for doing so. The government will lend these 'investors' huge amounts of taxpayers' monies to buy this toxic garbage, oops I mean ‘ troubled assets.’ The government will also hire some financial firms to facilitate this movement of crap, oops I mean ’troubled assets.’ Some cynical people are saying this crap, oops, I mean assets, is financial toilet paper and should be flushed away. But at least we are flush again thanks to the taxpayers--and it was all done within the free market system. It's a great example of ‘public, private partnerships,’ I would say, and a victory for free market forces everywhere.
“Still, there is some negativity out there and much criticism of us. But we must not stoop to the level of our critics; we must rise above it all and take the high road. Without our expertise, governments could not function properly. After all, who advises them but us? And who gives some politicians jobs when their careers are over? Us, of course! And who lends the people their own money? Us of course!
[A thunderous wave of applause ensues and there is much cheering and back-slapping amongst the assembled money men.]
"I will close now my friends, but I must say that I am ecstatic about the ‘bad bank’ idea. The taxpayers are now its bankers and God help, oops I mean bless, the taxpayers. ”
[A standing ovation ensues and some voices are heard shouting, "Public private partnerships have saved the free market system!”]
Stephen J. Gray
March 23, 2009
