Calculated Risk: Federal Home Loan Bank of Seattle Suspends Dividend

Calculated Risk quotes Roubini while reporting that "The FHLB system has $1.25 trillion of debt, making it the largest U.S. borrower after the federal government." Here's Roubini:

"A system that usually provides a lending stock of about $150 billion has forked out loans amounting to over $750 billion in the last year with very little oversight of such staggering lending. The risk that this stealth bailout of many insolvent mortgage lenders will end up costing massive amounts of public money is now rising."

I think someone needs to do some accounting for just how large, in total, the bank bailout has been.

So many pieces of the bank bailout seem to have been accomplished in the dark, that I feel like I don't have a good guess, even, as to the extent of the transfer of wealth involved.

Fannie and Freddie were taken into receivership and commissioned to buy up crap.

The FHLB system was, first, used to prop up Countrywide and the rest, but, evidently, was thrown into the breach to an even larger extent in the last year.

The Treasury proposed to buy up toxic crap, but ended up buying preferred stock with its $350 billion. The Federal Reserve, on its own nickel, though, ended up executing the original $700 billion TARP plan, and bought up that toxic crap.

Then, there was the AIG bailout. The $300 billion guarantee given to Citibank, which seemed to pass under the radar pretty quickly. The special tax break given to Wells Fargo to take on Wachovia -- no reliable word on how many billion that was.

And, of course the FDIC has been taking hits.

I'm probably leaving something major out.

I think one should be able to acknowledge that drastic, massive action was necessary to preserve the financial system, without having to go along with these huge transfers from taxpayer to the predatory class.

The banks could have been nationalized, and the losses imposed on bank stockholders, and when their pockets gave out, on bank bondholders, bless their hearts. Bankruptcy and the criminal law could have been employed to see that Angelo Mozilo and his ilk paid something, rather than walking away with parting gifts.

What has been done here is almost as unconscionable as the $3 trillion wasted on Iraq and Afganistan. And, yet, the Washington Post writes about how we cannot afford Social Security and Medicare.

There's something America cannot afford, and what we cannot afford is the elite that thinks this is any way to run a country.