When Citibank was bankrupt the Secretary of the US Treasury gave Citibank $45B for preferred stock - basically no strings attached. Shareholders of Citibank kept their equity. The Citibank management that had run it into the ground and stayed in place will now be the ultimate decision makers at Kodak.
Why isn't anyone talking about breaking up these "too big to fail" banks? When they get in trouble again now they will be able to point to saving Kodak as another reason they should be bailed out. If you saw this situation in a third world country: National government loans to bank, bank loans to industry; you would see this a croneyism and not be likely to invest or build a business in that country.
Regardless of what I think, my point was that your phrasing made it sound like it was a gift when in reality it was a very profitable transaction for the treasury.
But now that the crises is over break them apart into smaller banks that are small enough to fail. Otherwise US taxpayers are liable to cover bad bets that Citibank makes yet any profitable bets stay with the company.
I would argue breaking up AT&T to allow competitors worked out to the advantage of the public AND the shareholders. The smaller baby bells now had to compete and returned more to shareholders than the monolithic AT&T would have.
Specifically, you have the moral obligation to negotiate that position for the benefit of citizens at large. The government did not do even really attempt to do that, which is a political crime for which there has not yet been a reckoning.
That doesn't mean it was right to not change the source of the problem after the crisis, but that's a whole other debate.
Nope, but the bank deals were much less evil than the auto bailouts, and not just because the auto bailouts are going to lose 10s of billions (or is it 100s) of dollars.
And then there's barney frank and chris dodd, the lead protectors for fannie and freddie (who we now know lied about their subprime exposure). The former will finally leave congress this year and the latter left in 2010, but is now pushing SOPA for MPAA.
Solynda et al is somewhere in here.
And let us not forget lightsquared, the folks who are trying to screw gps.
Never rely on reporters from CNN to do arithmetic. This is the daily TARP update:
Edit: And for the record, that is from the US Treasury, who you know is going to put it in the best possible light(ie, least loss of $$).
Even if they hadn't driven a hard economic bargain, the government could still have imposed salary/bonus restraint. The argument that the banks had is that everyone would leave : The reality is that in a hyper-regulated business, the government/FINRA could just politely suggest that people either stayed in their current jobs (to comply with their regulatory duties, etc) or leave the industry...