Bullshit TARP Bailout
Quid no quo for taxpayers
Bailouts -- love 'em or hate 'em, one thing is always true: Somebody gets bailed out and somebody else does the bailing. It might be the fortunate bailing out the poor, or it might be the other way around. With TARP, the Toxic Asset Ripoff Program™ it was the other way around.
It may surprise some of you who have read my take on the financial situation to learn that I favor rescuing the likes of Bear Stearns and AIG. Coffee could be hard to come by in an anarchic trading environment where nobody trusts the other guy's money. Nobody wants a situation like that. Therefore, it is necessary to keep the financial dinosaurs on their feet, at least until something better can be worked out.
The problem with the rescue plan as I currently understand it: If the taxpayers pay to save an entity like AIG, the taxpayers should gain ownership of AIG. This is not small potatoes. The AIG bailout alone will cost upwards of $60 billion. Every member of your household will be paying close to $300 to pull AIG's nuts out of the fire. Don't you think you should get a little something for that? If an AIG representative knocked on your door and asked you to give him $300 for every member of your household, you would want to know what you were getting in return, right?
But nobody to my knowledge is talking about taxpayer equity in AIG or any other bailed out firm. Is the public supposed to give charity to the Wall Street tycoons? What do we get for our $60 billion? Coffee? And you thought Starbucks was expensive!
Working people are bailing out the big boys. Shouldn't it be the other way around? "With great power comes great responsibility," and all that?
After saving a firm's bacon, the government should heavily regulate or even actively manage the firm to avoid another "situation." Obviously, the executives who made the decisions that caused this mess should be punished, not rewarded. At the very least, a 90 percent tax rate on income over $2 million should be imposed retroactive for five years on all compensation they earned while driving these firms into the dirt, and there should also be a thorough investigation into whether or not fraud occurred in each and every case. If fraud did occur, it should be prosecuted. Sorry, but this is America, and if you screw up, you don't make millions of dollars off the taxpayers for doing so; likewise, if you defraud investors, you go to jail. Whether their fortunes were gained through incompetence or fraud, these motherschtuppers need to pay.
They need to pay for two related reasons: 1) Because actions have consequences and 2) to avoid moral hazard. If we fail to punish these guys -- if, indeed, we reward them -- why on earth wouldn't they do it again! The punishment should be severe to strongly deter the sorts of shenanigans that led to this mess. If some poor schmuck can do a few years in the pokey for selling some dime bags, these guys should do at least as much time for wreaking the havoc on our society that they have.
Business always looks for a quid pro quo. Taxpayers foot the quid, but where's the quo? Do we get our money back after the rescued firms return to profitability? It would seem not because nobody's talking seriously about nationalizing these beasts outright.
Why not? They'll say it's not the American Way. Look, hyper-capitalist dudes, you can't have it both ways. If the government really has no place interfering in the market as you have (erroneously) claimed, then suck it. Get on the unemployment line like the rest of us. If you want a handout, expect to hand something back. Is that so unreasonable?
Without some sort of bone thrown to taxpayers, somebody needs to call this bailout what it is: Bullshit.