SO LET'S review. CIT, a commercial lender, found itself on the brink of bankruptcy and went to the government to beg for assistance. The government refused. Markets then proceeded to rise strongly, and credit markets basically shrugged. In other words, the government made the right decision. It determined that there was minimal systemic risk involved in letting CIT go its own way, and it was right.

Clearly this is evidence of sinister political activity! So says Simon Johnson:

So then it all comes down to political donations.  At least in terms of what is in the public record, Mr. Peek has not been overly generous, but he did give money to John McCain – and not to any Democrats.  If this is in fact the limit of his recent contributions, I think you know the outcome.

Bob Subrick reacts:

I have no doubt Simon Johnson's analysis is correct.

Really? No doubt? Of course, if you read Mr Johnson's latest take, it's all about the size of the firm:

On who must be saved, we see the new dividing line.  If you have more than $500bn in total assets, post-Lehman, you make the first cut.  If you’re below $100bn (e.g., CIT), you can go bankrupt.

It's convenient; when Mr Johnson wishes to make the case that America is like an emergent market, government entirely captured by the financial aristocracy, then the decisions are politically based. But then when he needs to make a regulatory point about too-big-to-fail, political connexions suddenly cease to be so important.