Saturday, November 29, 2008

Buck Higgs Closer to Becoming a Bank (Bob Higgs)

Some humor from the estimable Bob Higgs:

COVINGTON, LA. (Nov. 29) - Buck Higgs, a down-at-the-heels hobby farmer living four miles north of this small southeast Louisiana town, said today that he would seek a banking charter from New York State’s banking department, a key step in his effort to change his business model and attract deposits.

This action comes immediately after Goldman Sachs announced that it had won the same kind of charter in an “effort to change its investment banking model and gather deposits.” Two months earlier, Goldman, an investment bank, received permission from the Federal Reserve to become a bank holding company, thereby gaining access to funds being distributed by the U.S. Treasury under the Troubled Asset Relief Program (TARP), a scheme created to acquire “toxic assets” (i.e., assets whose market values had fallen substantially) from banks and other financial companies, but not used for the statutorily authorized purpose. Goldman received an allotment of $10 billion from the TARP.

Higgs told reporters that his hobby farm had fallen onto hard times during the past year. Although his operation was not highly leveraged - Higgs’s parents had reared him to steer clear of situations where he might be unable to pay his honest debts - he complained that the government’s ethanol subsidies had diverted so much corn into the faux-environmental boondoggle that the prices of poultry feed had gone sky high, greatly augmenting the losses he normally incurred on his birds. He therefore blamed Wall Street, reasoning that the ruling class operates as a coherent unit, and if the power elite was responsible for wrecking the country’s great financial institutions and shoving the losses onto the taxpayers, then the elite ought properly to be held accountable for his hobby-farming losses, as well.

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