Apologists for government bailouts push two main myths:
But the official government overseer of the Tarp bailout program "“ the special inspector general for TARP, Christy L. Romero "“ has debunked both myths.
Today, Romero wrote the following to Congress:
After 3½ years, the Troubled Asset Relief Program ("TARP") continues to be an active and significant part of the Government's response to the financial crisis. It is a widely held misconception that TARP will make a profit. The most recent cost estimate for TARP is a loss of $60 billion. Taxpayers are still owed $118.5 billion (including $14 billion written off or otherwise lost).
And earlier this month, Romero stated that the portion of the Tarp funds which were supposed to help homeowners haven't been disbursed:
A fund to support homeowners in the communities hit hardest by the collapse of the housing bubble has disbursed just 3 percent of its budget and aided only 30,640 homeowners in the two years since its creation, according to a report released on Thursday by a federal watchdog office.
The Hardest Hit Fund, which was created in the spring of 2010, grants money to state housing finance agencies for efforts to help families that are facing foreclosure. It has "experienced significant delay" because of "a lack of comprehensive planning" by the Treasury Department and limited participation by Fannie Mae, Freddie Mac and the large mortgage servicers, said the report by the special inspector general for the Troubled Asset Relief Program.
"Look at the TARP money that goes out to the banks," said Special Inspector General Christy Romero in an interview with The Huffington Post. "That goes out in a matter of days. This has been two years and only 3 percent of these funds have trickled out to homeowners."
Indeed, bailing out the big banks hurts "“ rather than helps "“ the American economy. See this, this and this. (And it doesn't take a PhD economist to guess that using bailout funds to buy gold toilet seats and prostitutes is probably not the best way to stimulate the economy as a whole).
The only way to really stimulate the economy would be for the government to give money to the little guy on Main Street "“ instead of the big boys on Wall Street. And see this.
Yet the big banks continue today to be bailed out through a wide variety of overt and hidden schemes "¦ while the little guy gets nothing.
This is true even though the American people were opposed to the bank bailouts from day one, and continue to oppose them:
As I've noted since 2008, Americans are united in their overwhelming disapproval for bailouts to the big banks.
This has remained true right up to today.
As Rassmussen found only last month (as summarized by KXLF news):
Today's Rasmussen Reports survey finds that most Americans don't like bailouts for financial institutions.
60% Oppose Financial Bailouts; 74% Say Wall Street Benefited Most
Survey of 1,000 American Adults
***
"¢ Just 20% think it was a good idea for the government to provide bailout funding to banks and other financial institutions, but 60% say otherwise.
"¢ While many activists try to link the Republican Party and Wall Street, Republicans think the bailouts were a bad idea by an eight-to-one margin.
"¢ Those not affiliated with either major party think they were a bad idea by a four-to-one margin. Democrats are much more evenly divided. Thirty-four percent (34%) of those in the president's party say the bailouts were a good idea while 42% disagree.
"¢ Overall, 68% believe that most of the bailout money went to the very people who created the nation's ongoing economic crisis, but 12% disagree and 21% aren't sure.
[And see this]
As the Washington Post's Greg Sargent notes, the recent proposal from lobbyists to the American Bankers Association recommending ways to co-opt the Occupy movement accurately stated:
Well-known Wall Street companies stand at the nexus of where OWS protestors and the Tea Party overlap on angered populism. Both the radical left and the radical right are channeling broader frustration about the state of the economy and share a mutual anger over TARP and other perceived bailouts. This combination has the potential to be explosive later in the year when media reports cover the next round of bonuses and contrast it with stories of millions of Americans making do with less this holiday season.
(Except that it is the majority of Americans "“ not "extremists" on either side of the aisle "“ that share this anger).
The "Tea Party" movement was centered on the protesting government bailouts of the giant banks, before it was hijacked by the mainstream Republican party, Sarah Palin, Neocons and others. See this, this, this, this and this.
Ron Paul said last month at a GOP debate:
Bailouts came from both parties"¦. If you have to give money out, you should give it to people losing their mortgages, not to the banks.
And one of the most common sayings of Occupy Wall Street protesters is:
Banks got bailed out. We got sold out
(See this and this.)
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
Yay, honesty. Ron Paul has all sorts of opinions I do not share, but he was the ONLY candidate in two straight elections that offered an actual change. Rhetorical change is set to defeat actual change for the second year in a row, as the media work to create excitement over the duel between banana republic flan and blooming desert flan. All of that bland slop being extruded in glowering, taunting malevolence.
Bastiat may have said ” that which was not seen” by Hank Paulson was The People. Paulson bailed out the banks, the banks were desperate. Sure some people were losing their jobs, 700K a month, but the banks, Wall Street, was collapsing. You can do with a million out of work, what does that compare to losing the money center banks?
And he had a point, the problem was that the people who owned the banks, ran the banks, and financed the banks were left intact. The Bailout was a reverse neutron bomb. Nothing changed… and even after THAT the bankers may STILL have held the tinest of fig leaves over their exposed parts, but… but it was AFTER the bailout that sealed their place as the most reviledwhen the guys continued to pay themselves the big bucks, bonuses, and options. That was the real problem. Their was no culture of shame, no Japanese-like bowing, no asking for forgiveness.
Why didn’t the bankers donate 100% of their pay to the foreclosure, unemployed, hungry and disabled? Why?
While the government is bailing out people who are under water on their mortgage and while they’re continuing to funnel funds to the banks, where management STILL makes unbelieveable amounts of money, how about a little for we renters? You know, the ones who have seen their rents increase from all that money sloshing around. You know, the ones that have to fund our friends’ mortgage deduction subsidies, not to mention the child credit subsidies…
How but some for those of us who were prudent and bought houses we could afford? Bought houses to live in, not make money from? Did without 10 foot ceilings, granite countertops and three car garages?
The ONLY thing the government should do is refinance those who can’t for because their LTV is over 100%. For the FULL amount of their loans. If anyone gets a principal write-down, then I want a principal write-down too.
Until someone goes to jail for the blatant criminality that caused TARP to be needed in the first place, the looting will continue. Did anyone actually think this "plan" was doing anything to remedy the situation? Everything about our monetary and financial system is to support the "banks" (I use quotes because that designation covers a whole gamut of non-banking interests).
The markets were up another 114 points today. Why? According to the Yahoo Finance headline, it was attributable to housing and profits.
Right.
Theft under the color of law is highly profitable.
The entrenched elites of the world, both political and financial, have formed a gigantic circle to blow smoke up each others asses! THIS TIME IS NOT DIFFERENT! The only way to correct this disaster is to get them all out, restore reason and responsibility, deleverage and default, reboot and start over. BUT, all of the idiots that created this mess should lose everything they sucked out of the system, before the collapse, knowing it would all collapse. Let them choose that or spend the rest of their lives in jail. Common Sense from the Heartland – http://howardwemple.com.
Did anybody really expect anything else?
“[R]eality must take precedence over public relations, for Nature cannot be fooled.”
Can never be said often enough.
You must be logged in to post a comment.
When Albert Einstein died, he met three New Zealanders in the queue outside the Pearly Gates. To pass the time, he asked what were their IQs. The first replied 190. "Wonderful," exclaimed Einstein. "We can discuss the contribution made by Ernest Rutherford to atomic physics and my theory of general relativity". The second answered 150. "Good," said Einstein. "I look forward to discussing the role of New Zealand's nuclear-free legislation in the quest for world peace". The third New Zealander mumbled 50. Einstein paused, and then asked, "So what is your forecast for the budget deficit next year?" "”The Economist, June 13th 1992, p. 71).
Read Full Article »