Here's a good one: Banks that are receiving TARP money are using a portion of that cash to step up the purchases of Treasuries -- which in turn is helping hold down interest rates. Bank holdings of government securities are up 15.6 percent from a year ago.

Bloomberg sums it up this way: "U.S. lenders bailed out by the government are returning the favor by stepping up purchases of Treasuries, helping to temper a rise in borrowing costs."
Returning the favor? That's one way of looking at it, but I think that's too gentle a way to describe it. The arrangement sounds more like a con of some kind. The Treasury borrows money to lend to the banks, and then the banks lend that money to the government so the government can hold down its borrowing costs. And of course, hundreds of millions in fees and salaries are generated through this exchange.

I'm sure there's a principled distinction between that arrangement and various kinds of collusion and insider dealing. But I just can't, for the life of me, figure out what it might be. I mean, think about it: If the banks have enough capital to go buy Treasury bills, why don't we just reduce their government aid by that amount? Why allow them to earn a return investing back in the institution that bailed them out? It just doesn't make any sense.

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