Bailed-Out Banks Making Profits -- For Taxpayers

[babylonsister]

Chris Weigant
Author, Political Commentator, and Blogger (ChrisWeigant.com)
Posted: August 31, 2009 07:08 PM

Bailed-Out Banks Making Profits -- For Taxpayers



Some of the Wall Street firms who got so-called "bailouts" from the taxpayers are making money again. But this is not a scandal, it's good news. Because the United States Treasury is raking in some of these profits, as a result of the money invested earlier under the Troubled Asset Relief Program (or "TARP"). This should not come as a stunning surprise, but it indeed may to some people -- because of the massive failure to politically frame the issue correctly when the money was originally invested. This failure, it should be noted, is shared by both the Bush and Obama administrations.

Here's a quick quiz: When I say "bailout," what springs to your mind? Shoveling taxpayer money at Wall Street for free? Or investing public funds to shore up our banking system, with the expectation that when times got better we'd turn a profit on these investments? While the program has been derided in the public's awareness as the former, the latter is closer to the actual reality. And the reason many Americans would choose the first answer is a failure of politics.

Because the taxpayers did not just "hand money out for free." Money wasn't just "given" to Wall Street firms. It bought something of value. And now that the firms (and the market in general) are recovering, they're starting to pay it back. With interest.

But the news is not all rosy. The jury's still out on a lot of the government money invested in the past year, and some of the firms propped up by this money could eventually fail -- meaning our investment would be worthless. So it's a little early to proclaim a wide-reaching victory for the whole idea.

Even so, the news that we're making a profit really shouldn't be as shocking as it may seem. Because that was the plan all along. The reason for the shock is that this message never really got out to the public. Even now, writing about it, I find myself wanting to type "money given to Wall Street" rather than "money invested in Wall Street," because that's the way everyone now talks about it.

more...

http://www.huffingtonpost.com/chris-weigant/bailed-out-banks-making-p_b_273327.html

[Tansy_Gold]

1. It's always the financially strong who repay quickly

Waht about those who weren't and aren't so financially strong? when will they be repaying their loans?

A few hundred million, even a few billion, isn't much compared to what was handed out.

So I wouldn't go calling anything "profit" yet. You don't show a profit until ALL the loans have been paid back.


Tansy Gold

[babylonsister]

2. Yea, this really sucks. I'm chastened. nt

[babylonsister]

3. And this is bad because?? Do tell. nt