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  • The Never Ending TARP Slush Fund

    This afternoon President Barack Obama announced that his administration would shift TARP’s $700 billion bailout fund away from big financial institutions and toward small businesses through small banks.Specifically, the Treasury Department will offer capital from TARP, at a 3% rate, to viable banks with less than $1 billion in assets. These small banks must first submit a plan explaining how the capital will allow them to increase lending to small businesses.

    But remember that TARP was originally sold to the American people as a way to protect the economy from the systemic risk posed by the collapse of firms that were too big to fail. Small businesses and small banks are by definition not too big to fail.

    First under the Bush administration and now under Obama, TARP has become a slush fund for pet political priorities. And as the New York Times reports, this time it is even being used to influence votes in Congress:

    What is striking about the S.B.A. initiatives is not just the size of the increases but whom they appear meant to impress. The new loan limits closely track increases proposed by Olympia Snowe, the senator from Maine who is both the ranking Republican on the Senate Small Business Committee and possibly the only Republican considering voting for Democratic-led health care reform.

    At least one observer was not surprised. “Who is the one senator they need on health care reform?” a lobbyist who has followed the issue asked, rhetorically. “What number do you think they’re going to pick?”

    The Obama administration has the authority to extend TARP until next October. But even members of his own party are growing tired of the lawlessness it has created. Rep. Dan Lipinski (D-IL) has called for TARP to be ended this December, telling USA Today: “We don’t even know where the money went.”

    The only way to prevent further misuse of the program is to end it.

    Posted in Economics [slideshow_deploy]

    9 Responses to The Never Ending TARP Slush Fund

    1. Todd, Iraq says:

      Well TARP of course has turned into a political tool for Obama and his slew of cronies in the "Dumbocrat" congress. He thinks by shifting untold (B)illions to everyday folks he can carry favor meaning votes when the time is right or perhaps he just wants people to like him. Not likely he needs to be loved by all and attacks anyone who says otherwise from Joe the Plumber to Fox news etc.

      He thinks he can TARP us all and we want be able to see what's truly taking place but in this he's sadly mistaken. I just hope there's enough fine Americans out there that still care and are willing to stand up and NOT give him the votes he's BANKING on with our money mind you.

      It's funny he takes your money with his right hand and gives it back to you in some other form with his left, (haha) remember folks he's left handed. I can think of many better ways to spend $700billion, (1)pay down the debt or (2)cut every American a check and allow us to make our own decisions etc, etc, etc. The list is endless but bottom line this vote buying nonsense has got to stop.

      "Change" 2010/2012 wake up America

      Just A Point of View

    2. Jan,NC says:

      When President Bush left there was $350Billion left in the TARP fund. Then, the Fed used this money at the New President Obama's agreement for the bailout of GMC and other car dealers as well as the means to take the "toxic assets" off of banks books and closing small banks over the last ten months. Where is the $700 billion coming from? Only a few banks and holding companies have paid back their loans and warrants. There is also the problem with FDIC falling behind and the GSEs are still losing money!

    3. Jan,NC says:

      In addition to what I wrote before,there a question I have asked my Senators Hagan and Burr as well as Rep. Etheridge. In the (stimulus bill)ARRA of 2009 was the establishment of a new Small Business Broker/Dealer for the Secondary Market. The SBA website says it is still in plan and keeps getting delayed sort of like the Health Care bill. If you look at the bulk of the stimulus bill it is about the new Health Information Technology network with billions in money approiated. Since the GSEs are watched, is this going to be the new taxpayer guarantee loans for the "gamblers" to use to pool with health insurance money? One house representive has already called for Health Innovation Zones. Doesn't this sound like Enterprise Zones of the Community Reinvestment Act that helped bueacrats give taxpayer money to broker/dealers?

    4. Freedom of Speech, T says:

      If they are worried about appeasing (1) Republican Senator for the sake of "bi-partisianship", this is a continuing joke. Americans know this is BS.

      Moreover, Snowe should at least be honest and join the Democratic Party as did Spector. She is not "moderate". She already has Stimulus 1 to her historical credit. Why not this also?

      Giving the money to smaller banks does not mean they are going to lend it! In fact, most smaller banks are smart and do not want to be beholden to the Feds.

      The way you "help" small businesses is to allow them to make a PROFIT through tax cuts and incentives, then they will continue to take risks, expand, and employ more workers.

      When people have jobs AND THE GOVERNMENT DOES NOT TAKE AWAY THEIR DISPOSABLE INCOME THROUGH TAXATION – people will spend money and stimulate the economy.

      Boy, this sure is complicated stuff isn't it?

    5. Pingback: “Obama Pay Czar Driving Execs to Go Galt?” « Patriot Burr

    6. Pingback: Obama Pay Czar Driving Execs to Go Galt? | Conservative Principles Now

    7. Pingback: TARP: It Couldn’t End Thune Enough | Conservative Principles Now

    8. Pingback: Morning Bell: Bank Tax Misses the Real Bailout Deadbeats in Detroit and DC | The Foundry: Conservative Policy News.

    9. Pingback: Morning Bell: Bank Tax Misses the Real Bailout Deadbeats in Detroit and DC | Conservative Principles Now

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