The politicization of bank bailouts

Of course we know that some of the bank bailouts have been made possible by having friends in very high places.

So far, most of those have come at the discretion of appointed leaders within the Treasury. As such, it's a little harder to nail down the exact way in which strings are being pulled.

Now, a Wall Street Journal story indicates that Democratic Representative Barney Frank appears to have influenced legislation to benefit OneUnited Bank in his home state of Massachusetts.

As head of the House Financial Services Committee, Frank is in a position to do such things. Unfortunately, he's not alone, according to the story:

Several Ohio banks received funds after Ohio's congressional delegation complained bitterly about the treatment of Cleveland-based National City Corp., which regulators forced into a merger rather than provide with cash. And in Alabama, the state's top banking official says a windfall there -- five banks are slated to receive funds -- is testament to the influence of two powerful Alabama lawmakers who sit on key congressional committees.

If we want to keep political favoritism out of the private sector, which is one of the things President Obama campaigned for, then we need to simply let these banks fail. Sell the assets to the highest bidder. If no one buys the debts, well I guess the debts are forgiven.

How much further down the road to corporate welfare must we go?