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Good tarp news ?

8
garhighway10/05/2010 6:42:25 am PDT

re: #6 alexknyc

I’m not exactly a right-winger but even I bitched when the administration tried to limit bonuses.

First and foremost, those bonuses were contractually obligated. The Constitution is quite clear on the sanctity of contracts and the government being prohibited from doing exactly what they were trying to do.

Second, a large part of the economy of the financial district depends on those bonuses. Without them, restaurants and shops go out of business, pushing more people onto the unemployment rolls. Also, there would likely be a number of high-end apartment foreclosures.

I’m still on the fence about the bailout but I’m amazed that the government didn’t add any provisions about requiring a certain percentage of the money to be lent out. Banks got their money and either used it for mergers or sat on it as a reserve.

True and not true. Some of those bonuses were contractually required but many were not. And many that were required were not necessarily required in any particular amount.

And the “pay the trader a million dollars so he can buy a sandwich from the deli” argument does not fly, especially if the million dollars is public money. The TARP companies took a long time to figure out that operating with public money is different than business as usual.

But overall, TARP was a good idea. It stabilized the financial services industry at a point when the economy was on the brink of collapse. Without it, we’d have been up the creek.