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When Socialism Met Capitalism

A few days ago I noted one major hole in John Rawls' theory of justice, namely, corruption.  This New York Times article offers more evidence of the problem of government redistribution:

A tight-knit group of former senior government officials who were central players in the savings and loan bailout of the 1990s are seeking to capitalize on the latest economic meltdown, enjoying a surge in new business in their work now as private lawyers, investors and lobbyists.

With $700 billion in bailout money up for grabs, and billions of dollars worth of bad debt or failed bank assets most likely headed for sale or auction, these former officials are helping their clients get a piece of the bailout money or the chance to buy, at fire-sale prices, some of the bank assets taken over by the federal government.

In other words, the same crooks who caused a smaller meltdown are profiting again.  That, of course, is exactly what we'd expect to happen when the government does not simply enters an arena; but where, as here, the government has created the arena.  And the only way to get a seat is to pay admission.

The crooks of decades past are paying for their seat:

“Fortunes will be made here, no doubt about it,” said Gary J. Silversmith, one of more than a dozen former R.T.C. officials interviewed who now are involved in enterprises seeking to profit from bank bailouts.

Notice that he said, fortunes will be made.  He did not say that banks will be saved.  That's quite the linguistic distinction, isn't it?  Yet the government making the rich richer is exactly what libertarians like me would expect. The larger the government we have, the more government corruption we will see. 

Yet while John Rawls and others would create a huge government infrastructure to ensure that every citizen obtained "justice," he fails to note how decayed this infrastructure would be.  In light of the corruption we'd expect from the government, would a Rawlsian society truly be more "just," even by Rawls' own definition? 

More concretely: Did any libertarian not predict exactly what is happening in the Times article?  Yet, while noting this corruption, the liberal editors at the time ignore what has caused it - the nature of government itself.  I'd ask if the Times editors suffered from cognitive dissonance, if I were confident that they've considered the contradiction between big government and uncorrupt government.