Andrew Sullivan posts some thoughts by a reader on the proposed financial bail-out.
Third, the administrations proposals continue a process of socializing loss and preserving profits and distributions, many of which were made with full knowledge of the pending losses. When management distributes illusory profits to insiders in full knowledge of a massive loss, this is called a fraudulent conveyance, and in equity proceedings such distributions are routinely recovered for the creditor mass. There should therefore be a careful scrutiny of distributions of profits and bonuses by failed firms. The bailout we now see may mean effectively that taxpayer money is subsidizing the purchase of macmansions and Bentleys by investment managers who behaved irresponsibly.Â