Thank you Wall Street Journal for actually putting a number to this FDIC guarantee. I have mentioned many times that our financial oligarchs (which apparently now include General Electric ( )) are benefiting in a massive way from the FDIC backstopping their debt. I just never had a number. I have been chuckling to myself after troubled bank after troubled bank - including our lovely Citigroup ( ) extols they are able to raise money. First with the FDIC guarantee, and then lately without. Look oligarchs - I could take someone with FICO 300 (does it go that low?) and she can raise money as long as the government backstops it.

To which you argue ... but Mark, some of this debt has been floated without FDIC debt. The problems are almost over and its back to normal. To which I say dear sir (or madam) - this is our new normal. Every major bank in the United States is now Fannie Mae and Freddie Mac. Two institutions which for many years were never EXPLICITLY backstopped but everyone assumed if push came to shove it would happen. Push came to shove last year, and the US taxpayer came to the rescue. (Sep 7, 2008: Bailout Nation Continues - Fannie/Freddie Now Owned by You) In return for this IMPLICIT backstop Fannie and Freddie could undercut the free market competitors and raise capital at lower rates. Which is obviously damaging for anyone who would ever wish to compete against them.

Now extrapolate that to every major large financial firm in America. We have institutionalized too big to fail. Our largest oligarchs now have the implicit backstop of YOU. Even when the FDIC backstops go away we have demonstrated during this episode that when push comes to shove anytime in the coming 20, 50, 100 years our financial chieftains will be covered. So they will CONTINUE to have an advantage - just as Fannie and Freddie did for all these years. They will ALWAYS have a lower risk profile than SMALLER competitors. Because the government won't save the small guy. So they will be able to progressively squeeze out profit margins at the small and medium banks - because of you. Even if you are not willing. Because that is part of the American bargain. You are here to backstop banks.

So as we saw, this policy worked wonders at Fannie and Freddie - the 2 largest political donors for many years. Accounting scandals, poor performance, and eventual failures. Now all the large banks are under that umbrella. And most of America simply is oblivious to what has happened - after all its barbecue season.

With that said, this COST will only be with us for a short period of time - until the FDIC backstop goes away. But the BENEFIT will be into perpetuity... as I explained above. Because in "free market capitalist America" when the going gets tough, the losses get shifted the peasants. As would happen in any free market system. Dogma baby.