The $70 Billion Sellout

How the big-money boys cleaned up on the thrift rescues

Talk about adding insult to injury. As if the initial S&L scandal were not outrageous enough, the government reports that, thanks to sweetheart deals handed to federally subsidized fat cats, the bailout program will cost taxpayers tens of billions more than it might have.

The worst examples of government ineptitude concern 97 packages hurriedly thrown together in 1988 to shore up collapsing thrifts, many of them in the Southwest. Last week the Resolution Trust Corporation (RTC) reported its findings on how this first wave of bailouts was handled. Among its conclusions: the transactions were so poorly designed and generous that they...

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