Administration refuses repayment of TARP funds?

Tuesday, April 7, 2009 Comments

Reportedly, many banks who were not in trouble were forced to take TARP bailout money back in the fall. The reasoning given was that this was to hide from the public which banks were actually in trouble. While I can see the logic in that, you can't have it both ways. You can't force a bank to take money it doesn't need and then turn around and say that because they "chose" to take TARP funds they are now subject to government control over executive decision-making for their firms.

Congress is framing all of these sweeping increases in power over banks (and other companies) as being directed at only those who were in trouble and ended up in a situation of needing government assistance (in which case, the argument goes, they "deserve" to have the government take over for the greater good). But this argument obscures the truth, which is that the government is seeking to control firms that are running just fine and only accepted TARP funds upon being forced to by the government.

It seems to me that the government ought to be jumping at the chance to recoup even a portion of what it has paid out. Instead, the Obama administration has actually threatened at least one bank CEO with "adverse" consequences if he continues to press to be allowed to repay the money (which he didn't want to accept in the first place).

So, they are forcing the profitable banks to keep their TARP funds. At the same time, they are screaming for AIG executives to return the portion of their TARP funds spent on bonuses.
In the case of AIG, Chuck Schumer adamantly insisted that the money must be returned to "its rightful owners, the taxpayers." Nevermind that by "taxpayers" what he really meant was "the government." It's not like the government is actually going to give that money back to we the taxpayers, not the $165 million and not the trillions of our money (and that of our children and grandchildren) that they are now committing to spend.

But when other bank executives not only offer but plead to be allowed to pay their money back, their requests are rejected out of hand. Where is Chuck Schumer to insist that TARP money not needed by the firms who received it, be returned to "its rightful owners, the taxpayers?"

Meanwhile, Fannie Mae and Freddie Mac plan to pay about $210 million in bonuses, but I don't see the same public outrage and grandstanding from Congress and the adminstration over those.

The goal appears to be assertion of more and more government control over the banks, and the economy in general.

At a recent meeting with bank CEO's, Obama threatened, "My administration is the only thing between you and the pitchforks."

In fact, Obama's administration is the reason for the "pitchforks" (at least with regard to AIG) in the first place. They have made every effort to stoke rage among the people and aim it directly at bank CEO's and other executives. They've had the help of Congress and allies such as ACORN, who organized the mob-tactic intimidation-force bus tours to AIG executive homes. In other words, the government is trying to use we the people as a weapon to be wielded any time they need to bully someone into doing what they want. We should not allow ourselves to be used like that.

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