Wait, the other $350b is available… with no additional rules?
On Thursday 1/15, the congress authorized the release of the second half of the TARP funds, putting another $350B into the hands of the Treasury Secretary … and just like the first half, with no requirements. Just a blank check. The main difference from the first time around is that this one didn’t make headlines.
with the news being dominated by Gaza, heroic plane crashes, and Obama appointments, there wasn’t any real attention being paid while the checks were being written. When the second half of the TARP money got handed out by Congress, there should have been some requirements;
1- The Treasury can’t give money to organizations without those organizations first enduring a ‘bank holiday’ style audit– who knows what these companies have hidden in the backs of their books? who knows what toxic assets lurk behind the scenes…. and i don’t want our tax dollars handed out to companies we don’t understand.
2- In order to receive money, an organization has to declare the actions they’ll take with the money– and the only acceptable actions are commercial paper lending, or mortgage loan refinancing. The dollars can’t be used to buy other banks, pay dividend, cash in stock options, or end up in exorbitant executive pay.
But Congress didnt do that, and another opportunity to make powerful change is lost to us. Check back in shortly when we hear more stories about how the banks took the bailout money and bought other struggling banks, or wrote down the exact value in toxic assets. Check back in to see the LIBOR rate not change, and the commercial paper rate remain sky high.
And this decision was suggested by the Bush admin, but was signed, sealed, and delivered by Obama himself.
http://www.nytimes.com/2009/01/16/us/politics/16stimulus.html?scp=2&sq=tarp%20obama&st=Search
So wack. So incredibly wack and just unbelievably stupid. I agree with everything you’ve said here.
And we haven’t even gone into the ridiculous tax cut-centric stimulus package. Larry fucking Summers and his dislike of infrastructure…there is a disconnect between Obama and his economic team right now that really needs to be explored and fixed. There is this fear of the idea of infrastructure spending, almost as if the idea of “spending” just means giving out money and getting nothing. Ridiculous. The republican fondness for tax cuts as a means of stimulating the economy does not have to be indulged at this point, there is nothing to support its merits. There is no reason to try to appease them to this extent…but Summers and his people essentially agree with the republicans on how to boost the economy, so Obama is being advised that way. You were definitely right about the economic team, or about some of them at least.
Oh you posted about that in the other post…I’ll repost part of this there.