By Merle Hazard and Wolf Jackson. Based on an idea by David Shayne.

I was working one day down at Treasury, when Bear Stearns gave me a call.
They said “Merle, we’re almost broke right now. We’re headed for a fall.
So I called up Ben Bernanke, and told him Bear was as good as dead.
He said, “Merle, let’s structure a massive loan, with a guaranty from the Fed!”

We got a little bailout, ain’t it fine to see?
Yeah we got a little bailout, from Fed and Treasury
Hope you like our bailout. Each brokerage and bank
Is getting extra capital so markets do not tank


Uh, Ben, I hate to say it, but the banks are afraid to make loans…. Yeah, yeah, and the money markets are totally frozen too. Isn’t it a little bit like Japan, or, really a lot like it? … Well, sayonara to you too, good buddy.

I thought that might be the end of the problems in our e-conomy
But we had some failures at regional banks, taken over by the F-D-I-C.
The problems kept a growin’, ‘twas a non-stop panic attack
We set up a federal conservatorship of Fannie Mae and Freddie Mac

We have a swelling bailout. We hope you won’t dispute
The rapid way we’re spending. The problems are acute.
Come on support our bailout, we’re working ‘round the clock
To buy up toxic paper, and help the banks sell stock


I’m checking right here Ben, the T-bill yields yesterday were NEGATIVE. And unemployment could easily hit 11 percent, that is not a stretch….uh pitchforks in the street is about right, 10-4……Uh, yeah, we just can’t let them know that WE messed up.

Lehman filed for Chapter 11. Merrill had to sell to B of A
Morgan Stanley and Goldman are commercial banks now, it’s easier to tap the Fed that way
AIG, a big insurance firm, had some problems with derivatives they wrote
We’re sending billions to Detroit just to keep the auto industry afloat

He never showed me all the loans he made, but Ben kept printing up more cash.
Seems the more we did, the worse it got. Then we had a brutal stock market crash!
So we scrambled some jets from the federal fleet. We dropped ten trillion from the planes,
Plus some reprinted opies of “The General Theory of Employment” by John Maynard Keynes

We got a great big bailout, ten trillion bucks and more
Unprecedented bailout, it costs more than a war
We bailed out even big banks, like Citi and WaMu
Yes we got a great big bailout, but there’s more left to do!


The entire system? Borderline insolvent Ben? You’re right, I CAN’T handle the truth. So the hundred billion we gave Citi and B of A wasn’t enough? …10-4 Ben, just keep printing!

Some say to just shut down failing banks when problems start
And fire the boards and CEOs but, we don’t have the heart.
It’s easier to patch and mend and temporize away
Immediate cost is tough, we favor gradual decay


Setting a bad example? Messing around with incentive structures? Ben, you really are an academic. Remember what Tim Geithner said: those things don’t really matter any more…and don’t listen to Sheila Bair. All right…just keep kickin’ that can down the road and we’ll worry about that some other day, good buddy…Over.

Copyright 2009 Merle Hazard, Wolf Jackson and David Shayne.