Corporate Welfare Takes Many Forms

Ken Houghton looks at the short term credit auction, the price of the winning bid, and then throws in one of the most common assumptions of economics: these guys must be rational.

His conclusion is no surprise: corporate welfare. His post is well worth a read.

As a by the way, regular readers know I’ve been saying all along the big banks were going to get a bail-out, but I figured it would come only through tax breaks. Apparently I misunderestimated the ways that public money can be funneled to large financial institutions. Can you think of others?