Two months ago, the United States Congress passed, and the President signed, the “Great Bailout of 2008”. The Troubled Asset Relief Program, or TARP, was created to provide up to $700 billion of taxpayer money for use by the Treasury Secretary.
Administration of the TARP includes the purchase of mortgage backed securities as well as a program to purchase whole loan packages from regional banks to free up credit on the regional level. According to the Treasury Secretary, these programs will ensure homeownership preservation as well as increase the availability of credit to small businesses and individuals. The TARP also includes an equity purchase program and a program to establish insurance for troubled assets.
While lawmakers in Washington and members of the mainstream media want you to focus on the AIG bailout, the rescue of Bear Stearns, the takeover of Fannie Mae and Freddie Mac, and the latest bailout of Citigroup, I think you should take a look at the list of banks that have received funds or are in the process of doing so.
I find it quite ironic that some banks, which purchased other banks recently, are now on the list for a government handout. Would they have needed the handout if they hadn’t spent all their money purchasing banks that needed to fold in the first place?
The list below, which I found at the CNNMoney website, includes a list of the companies that plan to take part in the government’s TARP program. It’s a massive list of approximately 130 banks, and you’ll be shocked by some of the names on the list.
On September 16th, 2008, the United States government agreed to ‘bailout’ American International Group (AIG). The reason given to taxpayers for this decision was to “save financial markets and the economy from further turmoil”. Since that day in September, all we have seen are sluggish financial markets and economic turmoil. The American taxpayers have been left wondering if they really needed to bail out AIG in the first place.
AIG is the world’s largest insurer, and we were told that allowing the company to fail would have had a detrimental affect on financial markets. Over the past few months, the government has bailed out big companies like Bear Stearns, Fannie Mae, Freddie Mac, and AIG, yet they allowed one of the largest investment banks, Lehman Brothers, to go belly up. How did they decide which companies were worth saving and which ones were not? We have no way of knowing how each decision was made, but it’s clear that the government was not interested in spending money on every business that needed help and we are to trust that they made those decisions in the name of financial market stability.
Less than a month later, the U.S. Congress passed the “Great Bailout of 2008”. That bailout, unlike the others, required congressional approval, but like all the others, was passed with the promise to restore confidence in the credit industry, stabilize the market, and save us from even greater financial ruin. Only this time it cost a heck of a lot more than all the others combined.
When Congress passed the Great Bailout the American people were re-assured there would be transparency so they would know how much of their money was being spent, and where that money was being spent. So far, that hasn’t happened.