Friday, July 31, 2009

Banks in the News

J P Morgan and Goldman Sachs did not want bailout money. They were forced to take it and Paulson set the amount they were required to take. They have already paid back the TARP money. Now enter Andrew Cuomo, Attorney General of the state of New York (currently teetering on bankruptcy). According to Cuomo, these two evil banks, among others, paid out almost as much "bailout" money in the form of bonuses as they received. Evil, evil. Except that these banks never asked for the TARP money, didn't want it, and were threatened with punitive government action if they didn't take it. These facts are left out of the media stories that are floating out there today. This is big government at its worst. Is it any wonder that business is cringing and not anxious to participate in any recovery?

The WSJournal details the new administration's "regulatory" approach to banks which is forcing banks to curtail lending to businesses. Meanwhile, the Congress and the President are excoriating these same financial institutions for not lending. Thanks President Obama: tell them to lend and then instruct your regulatory apparatus to force them not to lend. This is certainly "change we can believe in." Is it any wonder that commercial loans are hard to come by. That will continue to be the case as long as this administration is in power.

1 comment:

Ms. Rachel Wood said...

Thanks for this. Do you have a reference for the fact that Goldman did not want bailout money? I happen to know it's true because of someone who worked at treasury at the time, but I'd like to see it in print so I can give others (who don't believe me) the reference.