Barny Frank, whoremaster of Georgetown, is pushing to ban all bonuses,any bonuses, being paid to any employee of a company that’s received TARP money. He also wants Congressional oversight over all salaries. Frank proposed this a year or so ago, pre-TARP and didn’t succeed. Now armed with a new rationale for the same fascist goal, he’s got a chance. I’d rather see my company collapse, throwing all my employees out of work and start again, rather than grovel before someone like Frank for permission to pay people what I thought they should be paid. I’ll be disappointed if a large number of corporate chiefs don’t agree.
Tag Archives: TARP
It says here that a third of all homeowners will walk away from their mortgages if the value drops 20% below what they owe. Why keep paying when something isn’t worth it? goes the reasoning and hence the term, “rational default”. This is probably a good reason to figure out the rental value of a house before you decide to buy it. If you do buy and the value drops but your loan payment is pretty much the equivalent of a rent payment, you won’t feel like such a chump.
But the gist of the article is that programs designed to forestall home foreclosures won’t work if house values keep dropping. Seeming to defy that argument, Citibank and JP Morgan, bowing to government pressure, have announced a moritorium today on foreclosures.
I continue to believe that the key to fixing housing is to move people out of homes they can’t afford and I don’t think our government’s doing that. I also don’t see the logic in bailing out the improvident and unlucky while telling more fortunate homeowners who have seen the same price declines yet keep their obligations current that they’re playing a sucker’s game. Somewhere down the line, won’t we all pay for this lesson?
But whatever I think, no one asked me, so we’ll just sit back and see how this works out. Europe, if you care, experienced the largest economic contraction last quarter in recent history. Whatever.
Own a bank? Have some loot. Here’s a list of who’s getting what. My favorite? Bar Harbor (Maine) Bank & Trust, $18,700,000. Those of you with long memories will recall that when our elected and bought politicians decided to rob us of a trillion dollars, it was to save the world from the financial ruin that would otherwise be wrought by the collapse of “banks too big to fail.” I like Bar Harbor as much as the next fellow – nice X-country skiing on Rockefeller’s carriage trails in the winter and harbor seals poking their friendly noses out of the water year ’round. But other than a laboratory dedicated to breeding white mice and a college for dope-smoking artiste college students, I never saw much there that could be mistaken for a fundamental building block of our economy.
So why $18.7 million for its bank? Why do I suspect that politics and graft, rather than a keen sense of economics, is behind these give-aways? Just a suspicious taxpayer, I suppose – one of my faults.
UPDATE: I stand corrected – Bar Harbor Bank & Trust is a community bank with 12 branches! Why that’s barely $1.5 million for each branch of this vital cog to industry and finance. Why so stingy, when the country’s welfare is at stake?
We’ve forked over $750 billion to bankers so that they can buy other banks, pay themselves nice salaries and attend conferences in sunny climes where they gloat over our stupidity and their greed.
Most of the banks that received the money are far smaller than behemoths like Citigroup or Bank of America. A review of investor presentations and conference calls by executives of some two dozen banks around the country found that few cited lending as a priority. An overwhelming majority saw the bailout program as a no-strings-attached windfall that could be used to pay down debt, acquire other businesses or invest for the future.
I can hardly wait to see what the next trillion goes to.