Chase Bail-Out of FDIC

Sources close to the Chase bailout of the FDIC tell me that the WaMu CEO held a conference call with top WaMu management in which he explained that Chase had no intention of actually buying WaMu until the FDIC, short on the cash it needed to bail-out WaMu itself, leaned on Chase to follow through on the bid. Chase, in return, wanted its own back scratched by the FDIC. What happened? Where does the FDIC go now when it needs money? You guessed it. Chase.

Chase just bought the FDIC. When the next big bank folds, who bails it out? Chase. When Congress moves to pass tighter oversight of the banking industry, who is going to threaten to stop funding the FDIC? Not the taxpayer. It's going to be Chase. We're taking giant steps toward the private sector takeover of government. While the nets and the blogs scream bloody murder about Main Street bailing out Wall Street, about these private firms becoming public trusts, the most liquid of the liquid firms left swoops down to gobble up Main Street.

Guess Bush showed remarkable foresight when he tried privatize Social Security. The next time private rapacity drains public coffers, some other solvent private entity will likely follow the example set by Chase today and offer a lifeline. How poetic that, as Bush leaves office, private interests score a major financial coup against the public good.