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+--- Thread: Punishment for paying off TARP loans with interest (/showthread.php?tid=91178)
Re: Punishment for paying off TARP loans with interest - michaelb - 01-14-2010
The Bush Administration had to do TARP, we really were in crisis last fall. But like so many things, they bungled the implementation of the TARP program, and failed to distribute money in a way that would limit the firms ability to launder the TARP money into huge profits for themselves. Very little blame for TARP can be attributed to Obama, but if Obama and the dems can't figure out a way to properly regulate these financial institutions to avoid a reoccurance in the future, then that failure is on them.
I don't really have much take on trying to extract some money out of the TARP profits now; this seems like a small, minor issue, mostly being pursued for political reasons, and hopefully not in lieu of taking on the big issues.
Re: Punishment for paying off TARP loans with interest - $tevie - 01-14-2010
Kiva wrote:
[quote=the_poochies]
At first they came for the bankers, but I didn't speak up because I wasn't a banker...
i hope that's sarcasm....you didn't just evoke the holocaust to make your point here, did you?
kiva
I've heard that quoted all over the place in the past year or so, even in humorous context. I think it's been overused to the point of dulling its original meaning and has become a member of the pantheon of cliches.
Re: Punishment for paying off TARP loans with interest - Ted King - 01-15-2010
swampy wrote:
So we ought to tax bank profits because...GM is losing money just like everyone said it would ... I'm failing to see why the banks in particular--or rather the customers of the banks who will enjoy higher fees and lower interest rates--ought to bear the financial cost of the Administration's ill-advised bailout of the UAW.
http://stossel.blogs.foxbusiness.com/2010/01/14/2303/
GM and Chrysler only received 1/10 of the amount of money spent on TARP. IOW, a LOT, LOT more money went to bail out the banking system than went to bail out the car companies. The vast majority of the money that will be collected by the tax will pay for the money banks received to bail out the financial system. And that tax will only amount to about 2% of the revenues of the banks that will be taxed.
Then there is just some plain old terrible logic in Stossel's argument. Look at this quote:
But by imposing the tax on only the largest firms, government officials said, they hope to protect consumers. Firms that raised prices would give smaller rivals a competitive advantage, creating an incentive for companies instead to swallow the cost, potentially by reducing employee pay.
Oh, now I see. They will only punish customers of big banks. If I run a small bank, this will now give me an incentive to stay small. I wonder how that will encourage lending.
Notice he doesn't make any argument at all against the claim that the big banks will swallow the cost because of competition from small banks but instead states a conclusion that is only correct if the claim that he never presented an argument against is wrong. That sort of "logic" probably works well with Fox listeners but it is completely invalid.
Then there's this:
The only reason that banks reaped "outsize rewards" for taking bad risks is because the government encouraged them to do that by guaranteeing mortgage loans. Risk taking got wild when government protected risk takers from feeling the consequences of a bad risk.
"The only reason..." Oh sure, it had nothing to do with credit agencies giving junk financial packages AAA ratings, or greed (which Stossel has argued is a great thing) driving executives to create layers and layers of leverage with instruments like credit default swaps. This blog entry isn't the carefully considered reasoning of an unbiased journalist, it is sloppy thinking by an ideologue.
Re: Punishment for paying off TARP loans with interest - mrbigstuff - 01-15-2010
good analysis, Ted.
Re: Punishment for paying off TARP loans with interest - Lux Interior - 01-15-2010
swampy wrote:
Ah, didn't read the link did you Lux? It's a short article.
No. I did not.
I would not trust Fox for any business news. They have all but publicly admitted that they are in the opinion business and not a news reporting unit. I will not support them with a page-view.
I generally don't trust any major media outlets for business news. They have too many conflicts of interest.
Re: Punishment for paying off TARP loans with interest - mick e - 01-15-2010
http://www.youtube.com/watch?v=SACE1tPEcbc
Re: Punishment for paying off TARP loans with interest - mick e - 01-15-2010
http://www.youtube.com/watch?v=zTc404BUXKY
Re: Punishment for paying off TARP loans with interest - swampy - 01-15-2010
Lux Interior wrote:
[quote=swampy]
Ah, didn't read the link did you Lux? It's a short article.
No. I did not.
I would not trust Fox for any business news. They have all but publicly admitted that they are in the opinion business and not a news reporting unit. I will not support them with a page-view.
I generally don't trust any major media outlets for business news. They have too many conflicts of interest.
So, again, it's the source of the story that you complain about, Lux. You can find the story all over the net. Find your own and get back with a logical comment on the story
Re: Punishment for paying off TARP loans with interest - swampy - 01-15-2010
Here's what I don't get. Some banks have paid back with interest the TARP money they received. Some banks were forced to take the TARP money even though they didn't want it. Some banks didn't take any TARP money at all. ALL are expected to pay the fee regardless. The only exceptions (so far) are small independent banks, Fannie/Freddie and other "special" interest financial institutions.
The thrust of this seems to be punitive because some banks made money this year and anticipate paying bonuses. Obama doesn't like bank executives getting bonuses. Obama doesn't seem to approve of a financial institution making a profit. So now the fees will be passed on to consumers (which it appears Obama doesn't understand that's how free enterprise works either).
Re: Punishment for paying off TARP loans with interest - kanesa - 01-15-2010
American citizens are against banking executives getting huge bonuses after they nearly destroyed the American economy.