You want our money? Well then fuck you
That’s essentially what Bob Reich seems to be saying here. Reich proposes that financial institutions who avail themselves of TARP II funds should be required to sign on to a litany of conditions that (in my limited but ever-increasing experience with banker types) will horrify and outrage their executives.
3. Prohibit any bank that gets TARP II funds from issuing dividends, purchasing other companies, or paying off creditors.
4. Bar any bank that gets TARP II funds from paying its executives, traders, or directors more than 10 percent of what they received in 2007.
5. Require that any bank getting TARP II funds be reimbursed by its executives, traders, and directors 50 percent of whatever amounts they were compensated in 2005, 2006, 2007, and 2008. This compensation was, after all, based on false premises and fraudulant assertions, and on balance sheets that hid the true extent of these banks’ risks and liabilities.
Personally, I like it. But everything I think I know about the financial crisis came from either This American Life’s credit meltdown series or the bartender at Macao Trading Company in Tribeca. I genuinely thought that having the government purchase stock in banks was the way to go, but Reich disagrees, which I find intriguing. Neither does he think we should be buying toxic assets off of the banks. If I’m reading this right, he thinks we should give money to banks, and banks should sell that money to customers, reopening the credit sluice and bringing profits back, albeit slowly, to the banks themselves.
I know that an open dialogue with my readers isn’t really what goes on here at the nurblog, but if anybody has any insight that doesn’t come from NPR or drunken wall streeters, I’d really appreciate it. Plus we can see if the comment section still works.
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