In an era where profit-seeking businessmen are considered guilty until proven innocent, it might surprise you that the government is helping fund some of the most blatantly fraudulent financial propaganda one can imagine. By way of our bailout bucks, Uncle Sam is producing ads that would make Kevin Trudeau or Ms. Cleo blush.

By now you’ve probably seen the folksy ads for Ally Bank, promising to challenge the supposedly nefarious bait-and-switch tactics of everyday bankers with an approach based on honesty and fair dealing. “We're a bank that values integrity as much as deposits,” explains the web site. “We won't deal in half-truths, kindatruths, or truths only buried in fine print. That's because we don't have anything to hide. We're always going to give it to you straight.”

That’s not just moxie – it's mania.

Ally Bank, “Pony” (2009)

Contrary to what the ads say, Ally Bank isn’t a new bank at all. It’s a rebranding of GMAC Bank, itself a unit of GMAC, the auto-financial black hole now on tap for its third taxpayer bailout. Just yesterday the Wall Street Journal reported he U.S. government is likely in inject up to $5.6 billion to the company, on top of the $12.5 billion it has received since December.

When announcing the name switch to Ally back in May, the company stressed their principles as “talking straight” and “doing what is right for the customer.” The print advertising claims “we make money with you, not off you.”

Yet the only reason Ally Bank, or GMAC for that matter, even exists is because of the continued involuntary generosity (read: looting) of taxpayers. The government, that is you and me, already own 35% of GMAC, a percentage likely to rise as the bailout bills add up.

Thanks to the ad blitz and higher-than-market interest rates, the bank has attracted billions of FDIC-insured accounts from “hot money” depositors, the type of practice that contributed to lenders like Corus Bank or Indymac blowing up. The FDIC backed $4.5 billion of GMAC debt this year and just announced plays to guarantee another $2.9 billion.

Straight Talk or Double Speak?

Ally Bank Print Ad – Fall 2009

In business, you’d call this the “sunk cost fallacy,” the belief that there’s a value in throwing good money after bad in a losing investment. And although the Obama administration has stressed it doesn’t want to own or run banks, the net result of more government assistance will be – wait for it -- more government control.

The hypocrisy of a bank on the cusp of its third multibillion-dollar taxpayer bailout changing its identity while running advertisements pledging to “make money with me, not off me” is stunning, akin to stealing your car, then offering to do you a favor in selling it back.

As we’ve written before, in a free market businessmen compete with each other on the basis of reputation and fair dealings.

And at a time in which nearly every banker or businessman is now demonized as a nefarious criminal, let it be known that the biggest overt flimflam in finance is the “honesty” of a multimillion-dollar, taxpayer-financed, media blitz not meant to promote Ally Bank’s shady reputation, but to hide it.