The Myth of Herbert Hoover

[Toddsterpatriot]

Yes, subsidized. That is what lender of last resort means. If banks are in a pinch, the Federal Reserve will lend them whatever they need. Banks act irresponsibly, betting that they will be bailed out if they fail. And most of the time, they are. Bear Stearns was bailed out, as was much of wall street via TARP. Banks that do fail simply did not provide the government enough political incentive to save them. If government picks the winners, the winners will be those most in bed with government. The winners are those who are most corrupt.

How is that a taxpayer subsidy?
Bear Stearns wasn't bailed out, they're gone.
Poor Jimmy Cayne lost $1 billion.
Does he feel bailed out? LOL!
They were gone before TARP was even imagined.
Now if you want to talk about Fannie and Freddie, they were definitely subsidized by the taxpayer.

Bank failure results when banks pursue bad business practices. It occurs when they fail to make profit. Bank failure is the "loss" side of the proft-loss mechanism in a free market. The Federal Reserve was created to bail out failing banks, functioning as the lender of last resort. This is no hidden purpose, it is stated. The Federal Reserve subsidizes the failure of bad banks that are politically tied to Washington or the Fed.

Lender of last resort means subsidizer of banks that fail. The last resort in a free market is bankruptcy, not bailout.

Bank failures can also happen during a liquidity crunch. Banks with decent balance sheets can still have liquidity issues. During the Great Depression bank runs killed profitable banks too.
How do short term loans erase losses? I'll give you a hint, they don't.
The list of huge banks that "failed" in 2008 shows that your claim about subsidizing failure is wrong.