Troubled Assets Relief Program (T. A. R. P.) should stand for tarp, a covering over the taxpayer's eyes so they don't see that this is just a wealth distribution scheme for big business. This whole thing is such a mess, first the administration asked for $700 billion dollars for a bailout program and said that they would create accountability by buying up bad mortgage assets to hold until such a time that the mortgages would increase in value and be able to be sold to pay back taxpayers who are ultimately paying the bill to bail out Wall Street.
Earlier this week Mr. Paulson from the Treasury said he decided that that was a poor plan to buy bad mortgage debt and instead told us, that after getting this money, he decided to just buy stock in the failing companies to faster inject cash into the failing institutions. The problem with that is instead of having some land or property that would eventually be worth something again when the market recovers, Mr. Paulson has basically a handful of worthless pieces of paper bought from failing institutions that have a good chance of filing bankruptcy in the future leaving the taxpayer with worthless paper in exchange for $700 billion dollars. The other problem with just buying worthless stocks is that Mr. Paulson, the President, or the Congress has no way of restricting what these institutions do with the money that they are given.
It was never the Administration's intention to hold these institutions accountable for the money in the first place. If you look at what President Bush and Mr. Paulson originally asked for it was for $700 billion dollars to spend in which ever way they see fit, to anyone they see fit, for whatever way the institutions that receive the money see fit. Are the American taxpayers the only ones that saw this for what it really was, a wealth distribution program where every man woman and child would give $2300 to the fat cats on Wall Street who are making millions and getting big bonuses even though they ran their companies into the dirt with their greed. And what happened?
The institutions that received the bailout money, that the Bush Administration's "intention" was to free up money tied up in bad mortgage deals to lend out to people, to get the economy moving again, decided that they still don't want to free up money for lending. President Bush was on national TV pleading with the financial institutions to fee up that money, but without the teeth of regulation and oversight there is not much chance of the institutions using the money for much more than to shore up their accounts, buy other failed banks, and/or give their management people and stockholders something. We've already seen how they been spending money knowing that they are getting bailed out by the taxpayers, there were big parties, million dollars a month for people on retainer, and holiday bonuses of up to $230,000 for administration making close to $400,000 base salary. So for those paying attention it is Fat Cats - $350 Billion, taxpayers nada.
Now that the 2nd bailout plan didn't work, Mr. Paulson has a new, new plan on another way to use the 2nd half of the $700 Billion bailout money to bail out these financial institutions. Again I don't see much for regulations or ways to insure accountability. This latest play doesn't directly help mortgage holders that are either already in foreclosure or will be shortly. That's the one thing I don't really understand. One one hand I can't see giving money to people who obviously knew they were trying to buy properties they couldn't afford. On the other hand, there are a lot of banks and mortgage companies that took advantage of the housing bubble to convince people to take out money against their mortgages because the value of their homes had went up so much. Many of these people didn't fully understand what the banks were getting them in to and they took their lending institution at their word that they were sitting in a good spot to take on more debt. To a certain extent, if the government would just take over them loans that are on amounts higher than what the property is worth, reorganize the mortgages so that the people could have payments that they could afford, then the mortgages wouldn't be bad debt and shouldn't strain the financial institutions of Wall Street.
Now the major domestic car manufacturers want to be bailed out too, they are claiming that they will be forced into bankruptcy if they are not. Originally Obama and the Democratic Congress wanted the Bush administration to help bail them out too, but the Bush Administration didn't want to include the auto makers. Now the Bush Administration says that they would be willing to support bailing out car manufacturers long as there are no strings holding car makers to use the money to make more energy efficient cars to make the auto makers more competitive with other car makers. Again the Republicans don't want to place any restrictions on car makers on how they use that money. What is the sense if that? If we are going to bail them out shouldn't we retain the right to say how we want this money used?
President Bush recently made a speech claiming that the fault is not fault the free market system. This is one of the first things I agree with that Bush has said in a long time. The free market would be a working system without trying to bail out industries. It's not like these financial institutions didn't know what was happening, they just were hedging their bets that the government would bail them out. The auto makers and Republicans have been fighting any effort to make strides to increase mileage per gallon or make alternative fueled vehicles, two things that have caused the big three auto makers to lose ground to foreign car makers. The Bush Administration has already wasted $350 billion dollars that has no regulations on how it's spent for these failing industries to take and cut and run when that runs out. These industries should have just failed in the first place, they are going to any way, the only difference is this way taxpayers are going to be out $700 billion dollars first.
All in all this is a hell of a Christmas bonus for big business from the lame duck Bush Administration at taxpayers expense.
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