Another Reason Why We Should Not Bail Out Companies

The federal government should not be in the business of bailing out businesses. Especially when those businesses are committing fraud.

The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration, The Associated Press has learned.

Two law enforcement officials said Tuesday the FBI is looking at potential fraud by mortgage finance giants Fannie Mae and Freddie Mac, and insurer American International Group Inc. Additionally, a senior law enforcement official said Lehman Brothers Holdings Inc. also is under investigation.

The inquiries will focus on the financial institutions and the individuals that ran them, the senior law enforcement official said.

The law enforcement officials spoke on condition of anonymity because the investigations are ongoing and are in the very early stages.

Officials said the new inquiries bring to 26 the number of corporate lenders under investigation over the past year.

Spokesmen for AIG, Fannie Mae and Freddie Mac did not immediately return calls for comment Tuesday evening. A Lehman spokesman did not have an immediate comment.

Just last week, FBI Director Robert Mueller put the number of large financial firms under investigation at 24. He did not name any of the companies under investigation but said the FBI also was looking at whether any of them have misrepresented their assets.

It doesn't take a genius to figure out why these companies were posting profits quarter after quarter, then all of a sudden...boom! they're about to go under. Call it sketchy math, cooking the books, Enron-esque, whatever, but the last thing that should be done is reward them for improper business tactics or incompetent management. Businesses fail everyday, what makes these companies any more important? The answer is...they're not. Sure the economy will take a hit for short period of time, but it always bounces back. It will make businesses not take anything for granted and restructure from top to bottom. U.S. automakers and airlines should be put on notice too.

I've already sent emails to President Bush and my congress-critters telling them to dump this plan. You can do the same easily by going to Conservative Alerts and entering your info.

 

***UPDATE***

Read this newer post about the bailout. Think the bail out is supposed to help Wall St & Main St?