When the TARP bill was first being discussed I made a statement that I would like to repeat about the TARP money:
[T]his should not be used as a windfall by Congress to fund some pet projects.
We have come to the point now where Congress is faced with the question of whether to extend the program past the initial time of authorization. From the earliest versions of the bill (not including the 3 page version written by Sec. Paulson) to the final version the program was authorized only until 2009 with the option for Congress to extend it as far as two years from the day it was enacted (October 10, 2010 being that two year mark). Faced with the reality of this first deadline there are people who are absolutely opposed to those members of Congress who have indicated a desire to not extend the program.
I stand by my response to what I called “my favorite section” of that first version of the bill:
Of course I won’t hold my breath that it will die in two years or less.
Indeed, Sec. Geithner testified before Congress yesterday that:
he would not support a permanent extension of the program, but . . .
(emphasis added)
From the very beginning of the debate there were people who recognized the potential for this to become a slush fund. “Rupert” said it perfectly in September of 2008 with his statement:
I would think that most of us old enough to buy beer would recognize those conditions as the perfect set up for another taxpayer fleecing.
Undoubtedly, the government will be quick to defend that the money has not been used as a slush fund to pay for things other than buying toxic bank assets (although there are some who have admitted the truth). The record clearly indicates that they have to lie to say any such thing. Within 10 weeks of being passed:
On December 19, 2008, President Bush used his executive authority to declare that TARP funds may be spent on any program he personally deems necessary to avert the financial crisis, and declared Section 102 to be nonbinding.
That opened the door for the government to bail out General Motors and Chrysler (neither of which is anything like a bank). Not only that, but PNC Financial Services Group was so financially troubled when they received TARP funds that they bought a rival bank within hours of receiving the funds (for just a little bit less than they received in bailout money. Now Democrats want to use the funds to give money to homeowners and the unemployed. None of that was part of the original program.
TARP has already been used as a slush fund and it should be shut down on December 31st and all unused money returned to where it came from (most of it was created out of thin air). I highly doubt that will happen despite the efforts of our highly connected and well tenured junior senator from Utah. I expect one of two things to happen – either the program will terminate by October 10th 2010 and the money will be thrown into the general fund (why give back what the government has already stolen?) to fund other projects in our bloated government or else the program will live on beyond the final expiration date specified when it was passed and the money will continue to be used as a very generous slush fund.
Man, if you want to learn more about the real problems with TARP check out the videos on http://www.icaucus.org. 95% of TARP funds went to 21 banks and 2 car companies. These companies in addition to Fannie Mae and Freddie Mac are funding between 65 and 75% of re-election campaigns for congressmen. Essentially they are using our tax dollars against us. And of course, our own Senator Bennett happens to be one of those who voted for TARP and has also taken extensive amounts of $$ from those very companies (http://www.opensecrets.org/politicians/contrib.php?cycle=2008&cid=N00006347&type=I).
So, if you want to help true patriots clean house next fall come to a motivation/education/training workshop in Sandy on Dec. 5th and learn how to do it. (Details here: http://www.facebook.com/events.php?ref=sb#/event.php?eid=167070988033&index=1)
I already know about the Independence Caucus and their research. I’m hoping to be able to make it to the Dec. 5th workshop. Thanks for sharing.
This reminds me of the famous Rahm Emanuel quote that you should “never let a good crisis go to waste.” The fed said that this was an emergency and we had to pass TARP quickly to avoid disaster. Now, some opportunists have taken advantage of the crisis and made a ton of money.
It also makes me think of the old saying comparing the making of laws to the making of sausage. I frequently hear people complaining that Congress can’t get anything done. The results might not always be pretty when a legislature takes its time, but TARP has shown that it is even worse when we rush emergency legislation.
TARP was passed not very long before Rahm Emanuel made that statement – he was talking about the financial crisis when he said that. I have long been of the same opinion you expressed – the faster something gets rushed through Congress the more I distrust the result.
Tarp hasn’t done is what it promised to do – unfreeze credit on Main Street- whose only source of capitalization remains the bootstrap economy of self generated profits, which as S corporations are taxed as individual income- meaning that boot strap economy profits are used for a dual purpose, to cover cost of living expenses and they are capitalization for the small scale business sector, – commonly know as “Main street”.
If a Main street business is so successful as to make a profit of 250,000.00 (which remember covers personal cost of living as well as business capitalization”), the Federal Department of Government Gluttony will reach out it’s slimy hands to grab small business profits to fund Big Government and it’s favored ones- non-profit organizations, high growth capitalism, and unions. So not only is Main Street not seeing any benefit in terms of unfreezing capital extended to Main Street, but we are being used to stuff the pockets of a growing hegemony of concentrated power and wealth.
While both sides of the political agenda spin the rhetoric of a more equal distribution of wealth, the chosen solution is always to feed the mouths of concentrated wealth and power.
The only way Tarp should be extended is if it is used to directly benefit small scale and modest growth businesses that directly provide jobs in the United States. Even the Tea Party movement is against giving any support to this sector as the cry of “government handout” is levied at the suggestion without one second of genuine consideration of the issues. The Tea Party movement cares not about the fact that this sector of the economy is scheduled to be taxed to death and to fund every one else- Truly taxation without representation. When the small and modest growth business sector is killed off, democracy will be one of the side effects.
With all due respect to the far right, we do not get from here to there by turning off a switch. Wars are fought in many ways. There is currently a war being fought against the United States to destroy it’s economy- at the top, and at the roots. The roots of our economy need watering. – There needs to be available credit and tax relief. We know that with a rapidly expanding deficit to finance the growing size of government, no tax relief is in site. The growth of big government sees the growth of small business, as it’s enemy, as a thriving small and modest growth economy benefits individualism-rather than collectivism. All of this is epitomized in the Obama’s campaign’s recently announced effort to raise cash to fight private citizen, Sarah Palin. What did she do- she published her memoir, as did president Obama. I don’t recall there being a concerted effort to raise cash to fight Obama when he published his memoirs.
Spot on Mackenzie, thank you. If 70% of our workforce (or 70% of voters, whichever is larger) were owners or employees of truly small businesses (I would say less than 100 employees) our country would have a much more sensible political culture. (For those who are curious, at SBA.gov they define small businesses as having 500 or fewer employees and state that those small businesses employ just over half the private workforce – with government employing 13% of the total workforce that means that even that generous definition of “small business” employs somewhere less than half of the workforce – and pays 44% of the private payroll in the country.)
I can understand your argument that the only way TARP should be extended is if it is used to directly help small businesses but I honestly don’t think that’s even possible. The government can talk about small business all they want but when it comes time to hand out money small businesses become invisible (despite any rhetoric about “main street”). I suspect that this is at least partially because they measure everything against themselves so there are only a few hundred businesses nationwide that they do not consider small – meaning that when it’s time to hand out the cash they hand it out to medium-large, and medium sized businesses (which are all small compared to the government) under the belief that helping anyone smaller will not have any noticeable effect on the economy.
All of this ignores the fact that the government has no business stimulating the economy (actually no ability, all they are able to do is distort it). Main street needs tax relief, but they only way they need available credit is when the economy runs on credit (I admit that our does). I’m just saying that if no credit were available to any size of business the large businesses would disintegrate, some small businesses would evaporate, and virtually everything that survived would be small businesses that adapted.