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.
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Comments
#1 Taxpayers Enter Junk Bond Business
It's even worse than I thought. The plan is to have the government buy the bad debt from the banks and insurers. This gets it off the banks' balance sheets and allows them to go on their merry way. It leaves the taxpayers holding about a trillion dollars in shaky debt that could become even more worthless if the housing market turns further south.
This is total and complete bullshit! We're being asked to pony up over $3,000 for every man, woman, and child in our country so that the banks can wipe this crap -- which was their own damn fault -- off their balance sheets.
Where is the accountability for the executives who paid themselves massive bonuses as a reward for causing this mess! Where is the accountability for shareholders who didn't do their homework before buying the stocks!
It's infuriating! The first place we should be looking to recover money is from the fat-cats who got disgustingly rich peddling pig shit-grade investments. The only bailout they should get is from jail while they await trial.
#2 Wow, they must think we're dumb...
... now some guy on CNN is trying to explain how taxpayers are going to make a profit on the deal. Right. Hand $700 billion to known con artists for crappy assets backed by nothing, assets that are illiquid by definition (nobody wants them) and somehow you're going to make money? Uh huh.
#3 ...and i meant to say...
... that even if this moronic bailout plan goes through, the effect will be to slaughter the dollar. you can't print a trillion bucks and expect them not to lose value.
oil had its biggest one-day gain EVER today, and this is just the beginning. get ready for ten-dollar loaves of bread in the near future.
this is gonna suck.
#4 A stalling tactic?
It occurs to me that the bailout may be more than just a giveaway to Paulson's buddies on Wall Street. It could be a stalling tactic designed to keep the big crash from coming before the election. Then they get the double bonus of stealing more of our money PLUS the benefit of handing Obama an even bigger mess than he's already inheriting.
Wow, these guys suck. I hope the Obama administration investigates, prosecutes, and incarcerates the lot of them.
#5 deal is near
if it doesn't include a significant equity stake for taxpayers in the bailed out institutions, it's bullshit. It's bullshit anyway. The sooner we face the fact that the whole damn thing is bankrupt, the better.
#6 Hoo boy...
... looks like it's a done deal. Some concessions were made, and that's good.
But are the loopholes big enough to allow passage of several Brinks armored cars?
#7 This comment was premature...
... it wasn't a done deal when the above comment was made. Now it is.
Congratulations! Your children and grandchildren are $700 billion-plus poorer!
#8 11 days later...
... it was almost two weeks ago that Hank Paulson swore through the roof that if we didn't hand him $700 billion within 48 hours, the credit markets would freeze up and financial Armageddon would be upon us. No deal yet, and no financial Armageddon. Hanky Panky's play for our money is starting to look a little suspicious.
"Your money or your life."
#9 I am so pissed off I can hardly see straight
$700 billion? We're giving them 700 billion dollars and getting a bunch of worthless derivatives contracts in return? Worse than that, we're going to pay a bunch of "experts" (the same experts who got us into this) to administer the worthless contracts.
Normally, I'm a pretty moderate guy, but this is pushing me to the verge of becoming a wild-eyed revolutionary.
These guys deserve prison -- or at the very least to be taxed out of their ill-gotten gains -- not more of our money.
#10 What is all this money?
It's crazy.
#11 Isn't it?
We're bailing out the fake parts of the economy -- the ones that caused all this mess, the idle speculators -- and leaving the real parts of the economy -- the workers, the car companies -- to rot. It's total bullshit.