One of the main sticking points with the public is executive compensation, namely bonuses. Now a sensible person would think that a bonus would only be given out when the company has a good year and there is extra money to be spread around, but not with the banks. No; f
Another laugh comes from the sentiment, "Oh, we're not using TARP money for bonuses, that's money we already had." So wait, if you already had money why wasn't it being used to help the company as a whole and not some high-level executive who most likely contributed to the problem? It's like Larry David's friend Simon in Curb Your Enthusiasm who gets a $10,000 loan from Larry only to throw a party that costs $10,000. Sure, the money he used for the party was not the physical money Larry gave to him, but without it he would have had to use the party money to stay afloat.
Barney Frank
Another tactic used by the banks at the hearings: blame others. When pushed on why they were not lending a lot of money when that was what the TARP money was for, Jamie Dimon (CEO of JPMorgan Chase) said that it was from a scaling down of lenders like money market funds and hedge funds. The irony of the fact that his bank is partially responsible for the decimation of peoples' money market funds it completely lost on Mr. Dimon as he laments the fact that money market funds are not as active as they used to be.
Representative Paul E. Kanjorski said it best when he told the banks, "When you took taxpayer money, you moved into a fishbowl. Now, everyone is rightly watching your every move from every side." Obviously this is something the banks are not used to, for when they gave money out (by buying sub-prime mortgages) they did not keep tabs on who they were lending to or how they would pay them back; the money was coming from somewhere (though those who did their homework knew it would not last long). This boosted profits and lulled the shareholders and other regulators into complacency. Now when I was in school and I did not do my homework and got a bad grade on a test because of it, the teacher did not offer to give me free points to save my grade; I was responsible for myself. But these banks did not do their homework and they did not just fail the test, they failed the semester and brought everyone down with them, but it's ok because Professor Government is going to give them free points, because they're too important to fail. Peace.
Photos - The financial world brain trust (New York Times), John Mack (CNN Money), Jamie Dimon (CNN Money)
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