Good tarp news ?

alexknyc10/05/2010 1:55:49 pm PDT

re: #8 garhighway

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.

I’m not privy to the actual language of the bonus clauses in the contracts (perhaps you are). What I do know is many of them were contractual obligations and, as such, the government is strictly prohibited from interfering with their disbursement. If they didn’t want the bonuses paid, the only option was to not give money at all which, as you say, would have left us up the creek.

As for your second point, no one made a “pay the trader a million dollars so he can buy a sandwich from the deli” argument.

The economy of lower Manhattan rests on the fortunes of Wall Street. Without those bonuses, the employees (and owners) of the businesses down there would have been up the creek.

I get that you’re a fan of TARP and I get that you resent the bonuses given out, but even so, these things are subject to the law of unintended consequences— and the collapse of the economy of lower Manhattan would have been one of them.

I also get that you think the collapse of the American economy would be a bad thing. So why would the collapse of the Lower Manhattan economy be ok by you?