Among the questions being aired: Has the Troubled Asset Relief Program worked? Have the taxpayers made a profit on the deal? Did we force loan terms upon those banks on the brink of extinction last year that were too steep, or not steep enough?
One question that perhaps isn’t being raised enough is this one: Should we let the banks repay the money?
To put it another way, by allowing the banks to exit the emergency program that saved their butts in the fall of 2008, is the government giving up what could have been an effective tool of leverage over this misbehaving industry?
That’s the way. Force loans on banks that don’t need them as a way of exerting governmental control. It’s already been happening; rewind to this April WSJ piece to see how:
Here’s a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.
Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He’s been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with “adverse” consequences if its chairman persists. That’s politics talking, not economics.
That’s creeping socialism talking, is what that is.
Thanks to my favorite reader.