TARP was FALSELY presented as the ONLY option to save the country, which was not true. However, it was the one the CORPORATIONS really wanted, because it was risk free cash from the government.
There is a reason Russ Feingold and Debbie Stabenow (FROM MI) voted against it.
The result of TARP was this:
The government purchased stock in a bunch of companies for $700B. (non voting shares, so we got no say in how things were run) And then ended up divesting themselves of the investments 6 years later for a total of 715.5B. So, the uninformed voter says "look, we made 15.5 Billion dollars". But, what the uninformed voter doesn't know is first, 15B on a 700B investment is a .6% ROI. Since we were running a deficit at the time, it means the 700B was BORROWED money we were paying interest on. Approximately 2.43%. So, in the very first year of TARP we spent 17 Billion in interest. I'm not going to bother going back and figuring out when we divested each investment b/c it doesn't matter... the interest in year 1 overshadowed the entire gain. So TARP LOST US MONEY.
Further, b/c of the consolidation allowed, we are now MORE at the mercy of the big banks than we were BEFORE TARP. And please don't sell me on the Dodd Frank "tools", because by the time you are using the TOOLS in that weak as water legislation it is too late.
Now, you also don't know the GAMES the banks played in the months/quarters after TARP. Did you know that they temporarily STOPPED foreclosing on houses? Do you know why? Because when they foreclosed they had to report it on their books as a loss of the loan. So, for about 18 months after TARP, if you didn't pay your mortgage.. nothing happened because the banks didn't want to show the losses so they could drive up their stock prices. So the banks started showing PROFITS (because they weren't reporting their losses).. this drove up their stock prices. They then did secondary offerings to raise additional cash at the new inflated stock price and tricked people into giving them more stability. THEN they went after those people who weren't keeping up on their mortgages with a VENGEANCE, because it didn't matter anymore. They had stabilized their books, raked in their cash for the secondary offerings and could now fuck the consumer good and proper... and boy did they. Robo-signings and all.
WELL.. WHAT ELSE COULD WE HAVE DONE?!?! MY GOD THE WORLD WAS ENDING.
There was another solution but it favored the people.. those dirty rotten 99%ers who got us into this mess in the first place by buying houses they couldn't afford. Forget the fact that were lied to by banks and mortgage companies. I had an argument with a mortgage broker in 2006 when they were trying to talk me into upping my bid on a property to a number I wasn't comfortable with... They told me I could EASILY afford the payments on an 5 year interest only loan. I told them I wasn't comfortable with the payment in year 6. "Well, you just refinance at that time". They told me. Me being a highly educated person explained to them that you can only refinance if their is enough equity in the property. They told me, but real estate ALWAYS goes up, so you are guaranteed to be able to refinance. She believed it. That is what she was being told. Luckily, I remember a previous housing crash in the early 1990s and helping someone move out of a house they were abandoning b/c it was "upside down".
The government COULD have taken that exact same 700 Billion and PURCHASED the troubled assets, instead of leaving the banks in control of them. This would have kept more people in their homes and likely would have made the government MORE MONEY over the long run.
But, instead the banks got free cash and then the ability to cook their books and on top of it, got to kick those 99%ers out of their homes and sell them to new people for a nice profit!
So please.. go sell TARP somewhere else.
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