GE finds a loophole

The article describes how GE, the largest industrial industry in the world found a way to take advantage of a program designed to support the banking industry. GE, like many other companies, has a finance subsidiary, GE Financial, to assist its customers when they purchase GE products and services. (Think GMAC or Chrysler Financial) GE Financial was allowed to apply for assistance from FDIC’s Temporary Liquidity Guarantee Program, or TLGP, because GE owns two small banking institutions in Utah. GE has benefited from the loan guarantees of this FEIC program and has paid the required fees for participation.

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/28/AR2009062802955.html?nav=hcmodule&sub=AR&sid=ST2009062803183

The lede is a good new summary lead with an ironic twist: an industrial company has become the beneficiary of a rescue program for banks.

Is the story news worthy? I think so. Many taxpayers are interested in knowing that the goverrnment’s ‘bailout’ programs are actually being implemented and that they are really helping the economy. This article addresses these concerns. It also addresses another concern; many feel that the financial sector should be reformed. Some feel that GE should be either an industrial firm or financial firm (GE Financial brought in nearly half of GE’s earnings in the last five years), but not both.