Is the TARP turning into a huge joke?

I was appalled to see the latest headline on CNBC.com that a Netherlands-based insurance company Aegon is looking to buy a small Maryland thrift company just to gain access to bailout funds from the TARP amounting to US$1 billion. It gets me thinking perhaps I should set up my own company as well because guess what, I also need a bailout.

Let me just offer a refresher. This crisis broke out a couple of months ago when Lehman Brothers opted to declare bankruptcy that led to a domino effect in the financial sector. The US Congress, through the insistence of the Treasury department, pushed the panic button and declared to infuse US$700 billion of taxpayers’ money to the faltering industry.

However, it proved to be that the devil is in the details since companies that were never intended to receive the funds initially can now have access to it if they change the nature of their business or if they have friends in the Democratic-controlled Congress like the Detroit auto giants GM, Ford and Chrysler.

Treasury Secretary Hank Paulson’s shift in position last week that offers bailout for non-bank institutions even made it more possible for party crashers to cash in into federal funds. There is a joke in Wall Street that coffee-chain giant Starbucks in also asking for a bailout. Good for them.

But the latest move by the Dutch insurer is just mind boggling. Americans taxpayers have no business bailing out non-US companies. There has to be some order on how these funds are allocated. Because so far there has been little of it.