I was watching CSPAN today and congress interviewed the CEOs of the larger banks who recieved money form the TARP program. Republican Representative Patrick McHenry asked if the money from the TARP was used to increase consumer lending or to protect the safety and sound being of the financial institution itself, and every bank member on the panel said it was to protect the banks themselves (not to increase consumer lending).
Wow.
What then was the purpose to bring this money forward for these assholes? If they were floundering so bad and going under, wouldn’t it be because of something they did? Were they in financial crisis to begin with? Not one cent was used for an increase in new housing loans or the stopping of mortgage foreclosures. Every one of these CEOs should be fired and fined for the programs they put this money into, when none of it was used for what it was given for.
Were are apparently losing roughly 7,000 homes a day in the US. That is 2,555,000 homes a year that get foreclosed if we don’t fix this problem. With roughly 600,000 jobs lost in just January 2009 alone, I can see this number going from about 7,000 a day to at least 9 or 10,000 a day, possibly more. If that holds true and nothing is done to fix this, then you have about 3,650,000 homes a year that are foreclosed.
So, going forward, we gave them a bunch of money, none of which was accounted for being used to increase the normal amount of mortgage loans or prevent foreclosures, in fact, the number has stayed relatively close to what it was a year ago, before they received TARP funds. They used this money strictly to preserve the BANKS bottom line, not for that of the people losing their homes. So why then, did we give them any money at all? As a tax payer, I will see none of this money returned to me. As part of the TARP bill in 5 years the president is supposed to recoup this money with taxes on the banks themselves.
I can see this causing a bigger problem in 5 years than we have right now, because banks will need to have a way to pay this money back, which would in turn become things like larger bank fees on credit cards and ATM machines, steeper fines for returned checks, etc, which translate to a larger burden on the consumer. To me this acts like a pendulum. Think of the money on the left swing being the government, the swing to the right being the bank, and the tax payers everywhere in between. In order for it to reach either side we are the ones who are moving the pendulum with our money. The tax payers. In one swing you take it from us and pass it to the banks, from the left to the right, and two, you make us pay higher fees in order to pay back money to the government only to have us pay twice. I don’t see how any of that is beneficial to anyone and if anything, its not even a total wash, but puts us in the hole later down the road. Unemployment is around 7% and rising. If the market doesn’t recovery quickly, this is going to get much worse before it has a chance to get any better. We have already been told that it is going to get worse before it gets any better, so that is just reinforcing what I see as a bad to worse situation, with no end in sight.