Thursday, January 29, 2009

Stiffed: Why are bailed-out banks helping Pfizer buy Wyeth?

From http://www.prisonplanet.com/stiffed-why-are-bailed-out-banks-helping-pfizer-buy-wyeth.html

Stiffed: Why are bailed-out banks helping Pfizer buy Wyeth?

Paul Rogat Loeb
Online Journal
Thursday,
Jan 29, 2009

Are U.S. taxpayers getting stiffed? Pfizer, Viagra’s daddy, is using money from taxpayer-bailed-out banks to help buy major pharmaceutical competitor Wyeth in a $68 billion deal. That won’t help taxpayers or consumers. Nor is it designed to. It will harm the companies’ workers, 20,000 of whom will likely be laid off. It’s even likely to hurt small bio-tech companies, drying up potential sources of capital and leaving fewer potential major investors or purchasers.
The deal may be good for Pfizer, helping the company recover from a $2.3 billion legal settlement over misleading marketing on the pain reliever Bextra, and helping them amplify the clout of the $3 million they recently spent lobbying against the right to import cheaper drugs from Canada. But it won’t help the rest of us.

So why are banks bailed out with taxpayer dollars furnishing the $22.5 billion of debt financing for this deal? On NPR, a financial analyst crowed about how wonderful it was that major banks were lending this kind of money in the current economy. But it troubles me that among the deal’s prime financial backers — Bank of America/Merrill Lynch, Barclays, Citigroup, Goldman Sachs and J.P. Morgan/Chase — all but the British-owned Barclays received money from the congressional bailout. So the funds they lent to this merger won’t be available to help smaller (or larger) companies keep their doors open producing and selling products — ideally ones that actually benefit society — and not just to consolidate control over their industry. This seems one more case of public subsidies for private gain.
(Article continues below)

I’m no economist. For all I know, maybe in some Henry Paulson-Alan Greenspan dream world this will end up boosting America’s physical and fiscal health. Perhaps the new combined entity will come up with some miracle drug that neither company would have created on their own. But mostly, it seems just one more example of how a bailout without strong government control, or even oversight, just feeds the same greed-driven abuses that have gotten us into our current predicament. It’s going to take more than Viagra to strengthen our economy once more.
Research related articles:

Banks Keep Mum on What they Did with Bailout Cash
GOP Senator Warns of ‘Riots’ if Automakers Are Bailed Out
US to inject $125bln into major banks this week: Treasury
Bernanke Admits Bailout is NOT Aimed at Helping Taxpayers
AP Study Finds $1.6B Went to Bailed-Out Bank Execs
Despite Taxpayer Bailout, Fed Says Banks Tighten Loan Standards Most on Record
US Giant Bailed Out By $85bn Loan
Europe, UK central banks shore up markets reeling from Lehman Brothers’ crash
Banks To Get £37bn From Taxpayer
China banks told to halt lending to US banks-SCMP
The Government Has Given Banks YOUR MONEY, and You Won’t Get Anything For It
Financial crisis: Banks shares plummet after bail-out deal

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