“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,†Alan Greenspan testimony to the House Committee on Oversight and Government Reform in the wake of the worst economic upheaval since the Great Depression.
Loosely translated that means: “Gee, I’m surprised that a bunch of money grubbing greedy sons of bitches with not a single moral or ethic among them would rob everybody blind if we let them.â€
That’s how I feel after supporting of the $700 Billion bailout package (TARP). I honestly thought that if the Government (that’s you and me) bailed the bankers out they would return the favor by loosening credit, re-negotiating mortgages, stimulating the economy and slowing, if not ending, the downward spiral we seem to be in.
Silly me.
So why hasn’t the economy gotten better after our first $ Trillion ($350 B in TARP plus $500 B to AIG, Goldman Sachs, CITI and a bunch of Hank Paulson’s friends before we got TARP) in giveaways? Let’s examine Bank America as an example. Having been given $25 B in bailout money they bought Merril Lynch and a major stake in a Chinese bank. Meanwhile back here in the good ole US of A they shorten the credit of Republic Doors and Windows which promptly closed it’s doors and put 300 people out of work*. If that’s not bad enough the CEO of failed Merrill Lynch, now owned by Bank of America, wants $10 million of the bailout for his bonus. He hasn’t gotten it yet, but that money would be about $33,000 per employee at Republic. Not mad yet? After the acquisition of Merrill and the Chinese bank they are laying off 30,000 “redundant†employees. It seems that the money we tax payers gave to stabilize the financial sector and save jobs has gotten 30,000 people fired at just one bank.
Still not mad? AIG, one of the pre-TARP beneficiaries of Hank Paulson’s largess, took $10 Billion and immediately threw a party for it’s upper management to the tune of a half $ Million including spa treatments and dinners at the rate of $100/plate. Not being satisfied with the first $10 Billion they came back and got another $8 Billion. Guess what? They threw another “executive retreat†for $350 million.
If you still aren’t mad, how about CITI Group. We gave them $20 Billion and they immediately invested $8 Billion in Dubai. Not here in America, in Dubai.
What happened to the oversight we were promised? Bush threatened to veto the bill if CEOs were held accountable and Hank didn’t buy troubled assets like he was supposed to. Instead he bought shares of the troubled banks which left their balance sheets with too much bad debt to loosen the credit market so they bought other banks instead of lending. Meanwhile, for less than 2% of what we gave Wall Street the UAW and General Motors have to jump through hoops, re-structure and accept a Car Zar to oversee everything they do. If you take a shower before you go to work and make money fudging the books you get $700 Billion no questions asked, if you get your hands dirty building things you’ve got to drop your drawers and submit to a cavity search. More on the big three and the UAW later, stay tuned.
So, like Alan Greenspan, I am in a state of shocked disbelief that a bunch of money grubbing greedy sons of bitches with not a single moral or ethic among them would take my money, stick it in their pockets, throw parties, pay dividends, give bonuses to failures in management and flip me the bird while putting more Americans out of work.
Bank America buys into Chinese bank & lays off employees.
*There’s more to this story than just B of A, but it’s still unfolding. It seems the owners of Republic recently bought a $2.6 million condo and another, less indebted, window manufacturer.
Andy Hailey