Historically huge amounts of public funds measured in trillions of dollars are being allocated to private corporations who are then using the taxpayers money for protecting and preserving the status quo, rewarding wrong doers, and buying influence with politicians in office. Here is a quick review of their actions to date.
Congress approves 700 Billion in TARP funds without enacting adequate constraints on the use of these funds, sufficient regulatory oversight, auditor insight, or any legal means to seek corrective actions. The taxpayers money in TARP has been used to:
- Pay 78 billion over market price for shares of stock and Paulson didn't get any shareholder voting rights.
- Make acquisitions - some banks that were deemed too large to fail are now even larger.
- Pay dividends to stockholders.
- Pay bonuses to the same people who caused this crisis at Merrill Lynch and at AIG.
- Pay off AIG's foreign and domestic creditors at full price without renegotiating the amounts of repayment as they would have if they had declared bankruptcy.
- Make campaign contributions to politicians in office.
In addition to these TARP actions the Federal Reserve, the FDIC, and the Treasury are making guarantees, purchases, and allocations without congressional oversight but with the apparent authority to obligate public funds. The amounts are mind boggling. Yet there is no relief in sight for Main St.
Consequently, the public has no confidence in the so called experts who are in charge of this stabilization, relief, and recovery effort. The public has little or no confidence in the government.