First Snow

SNOWY WEATHER comes to Red Square, a month before the winter solstice. Red Square
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Meanwhile Friday, John Tamny writes for RealClearMarkets:

Conventional wisdom says Henry Paulson's TARP (Troubled Asset Relief Program) was billed as necessary to avert an alleged run on the banks. In truth, the run on bank shares occurred after the imposition of Paulson's disastrous idea with Citigroup, Goldman and Bank of America in freefall ever since this plan was foisted on the banking industry and American people. This shouldn't surprise us given the basic reality that government money always weakens its unlucky recipients. Most shocking is that there was some consensus that non-economic lending got us here, but instead of allowing tight credit to weed out the bad, the conditions set to receive TARP funds meant banks would engage in more non-economic lending, thus setting the stage for the next crisis...

So to the extent that federal funds allegedly saved certain banks in the near-term, those same banks will surely pay over the long-term as the best and brightest exit the industry. There are no numbers supporting this yet, but it would be folly to assume that Goldman Sachs will recruit as effectively (Microsoft’s Bill Gates long noted that GS served as his greatest competitor when it came to attracting fecund minds) going forward considering that handsome compensation was one of the firm’s greatest calling cards. Goldman’s stock price surely to some degree reflects a future that is less bright...

Speaking once again to the truth that there’s no federal money absent strings attached, Treasury has made it clear that banks must aggressively lend in order to lift the economy out of the ditch. That being the case, it’s very apparent that to the degree banks comply, more non-economic lending will materialize such that the seeds of the next financial crisis are being planted right now...

Worse, governmental demands that banks lend with no regard to prevailing market conditions are an impoverishing concept. How soon we forgot that a successful capitalist system is reliant on the efficient deployment of capital..... With bank shares continuing to fall, the best long-term scenario we can hope for is that thanks to the federal government’s shocking ineptitude as economic backstop, we’ll have historical precedent to bolster the non-intervention argument the next time time around; "next time" perhaps coming sooner than we think given a Treasury that has pushed money out to banks while shouting, "Lend!"

So while it’s surely nice to think that government money borrowed from the private sector can somehow smooth out periods of economic uncertainty, TARP’s impressive failure shows yet again that far from stimulating, government “help” is an oxymoron that bats 1.000 when it comes to scaring away investors.

Bank Share Collapse Shows Failure of TARP.

Is TARP really a TRAP?

Haleigh Poutre's amazing recovery from severe abuse and death, through Michelle Malkin on the sanctity of life.