SURPRISE, SURPRISE! A report in USA TODAY states that the banks that received federal assistance CUT LOANS & GAVE RAISES! The report goes on to say that TARP-assisted banks were LESS aggressive in lending and gave BIGGER raises to themselves than banks that did not receive the aid.
I don't think I need to remind anyone that the primary objective of the relief program (funded by selling our children's and our children's children's children's futures to China) was to stimulate the flow of credit to businesses and individuals.
So, $247 BILLION later, how's that working out? I've reached the point that I don't even blame the banks anymore. This is what you'd expect to happen when you leave the fox in charge of the henhouse. I blame the government that propped these institutions up with taxpayer money, and then did not bother to put any kind of watchdog committee in place. Hand them a blank check, and just figure they're going to do the right thing, huh? Just like they did to get themselves INTO their mess.
The numbers are mind-numbing. TARP-assisted banks lent an average of 9.1% less than the year before, unassisted banks had a reduction of only 6.2%.
Here's a better stat. Average pay at TARP banks rose 9.4%, while non-assisted bank raises only averaged 1.8% !!
You may want to read that last stat one more time. Here in NJ, where property taxes are among the highest in the country (if not THE highest) teachers and policemen are being asked to forego raises to save jobs for co-workers, school budgets are being slashed, private sector unemployment is dangerously high. Yet, federally funded banks, that would be out of business if left to their own mismanagement, averaged almost DOUBLE DIGIT % PAY RAISES! ALL WHILE THEY REFUSE TO LEND TO THE TAXPAYERS WHO ARE BAILING THEM OUT!
It gets even better. Banks in TARP also cut costs less than non-assisted banks, 2.7% as opposed to 1.2%. That may not sound like a large disparity, but its significant.
So, where's the accountability? Once a year, a few bank officials go to Capitol Hill, where the pols grill them on where the $$$ is going and why they're not lending. The bank official, surrounded by attorneys and accountants, pulls out some fairy tale statistics and projections and explains how they're moving in the right direction. Its your classic dog & pony show. The senators get to appear self-righteously indignant for their constituents, the bank bosses get to show remorse and humility and cross their hearts and promise to do better. Then its down the steps and to the limo and back to business as usual. So they can start thinking about their next raise.
This country was founded on free enerprise and capitalism. Those banks should have been left to fail. But the bigger mistake was, once you've decided to bail them out, you've got to FORCE them to use the TARP funds correctly. Why was there no policy prohibiting any raises until the TARP $$$$ was paid back, or at least until they proved that they were performing in a manner for which the bailout was intended?
One of the Soviet leaders once remarked, "We will never have to militarily defeat the US to instill our way of government there. Creeping socialism will do it for us."
I apologize because that's not a word for word quote, but that's the gist.
Now I see that President Obama is appealing to Wall Street to "Join us in reform!"
Can't wait to see what happens next.
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