Barry, It’s All About The Narrative

Barry Ritholz asks why doesn’t anyone know what a profit is in relation to the government bailouts.

Why doesn’t anyone understand what a profit is? It is the total revenue minus the total costs. Which is why this FT headline is our second dumb headline of the day:

US Treasury’s bail-out profits top $10bn

“The US government has made more than $10bn so far on banks’ repayments of bail-out funds, according to a new analysis that suggests taxpayers might turn a profit on the unprecedented help extended to the financial sector during the crisis . . .”

No, they have not made $10 billion dollars. As the article later states, “Treasury still expects to lose $117bn on the entire Tarp Programme, which includes investments in the car industry and AIG, the insurer.”

Barry Barry Barry. I love the rhetorical question. They call it a profit because other wise people might see the hundreds in billions of dollars that are lost forever and may decide that the current occupant of the white house hasn’t done anything other than make this recession worse by it’s profligate spending.

Excuse me. Congress’ profligate spending.

Regardless, the narrative is that the bailouts and all the spending at all level of the government is needed because they know better than you do. If you start to question the bailout, why, you might even start to question other things and we can’t have that. Just read the legacy media and do as your told and things will be fine.