From Warren Buffet's recent Berkshire Hathaway shareholder letter:
[Berkshire]’s lending operation, though not damaged by the performance of its borrowers, is neverthelessthreatened by an element of the credit crisis. Funders that have access to any sort of government guarantee --banks with FDIC-insured deposits, large entities with commercial paper now backed by the Federal Reserve, andothers who are using imaginative methods (or lobbying skills) to come under the government’s umbrella -- havemoney costs that are minimal. Conversely, highly-rated companies, such as Berkshire, are experiencingborrowing costs that, in relation to Treasury rates, are at record levels. Moreover, funds are abundant for thegovernment-guaranteed borrower but often scarce for others, no matter how creditworthy they may be.This unprecedented spread in the cost of money makes it unprofitable for any lender who doesn’tenjoy government-guaranteed funds to go up against those with a favored status. Government is determining the"haves" and "have-nots." That is why companies are rushing to convert to bank holding companies, not a coursefeasible for Berkshire.Though Berkshire’s credit is pristine -- we are one of only seven AAA corporations in the country -- ourcost of borrowing is now far higher than competitors with shaky balance sheets but government backing. At themoment, it is much better to be a financial cripple with a government guarantee than a Gibraltar without one.
I can think of no better word than perversity, in the economic sense, for the above described Government policies. This is just one more example that the Government does not and cannot manage the economy other than to the detriment of individuals and business entrepreneurs.