Financial Crisis News: Most Americans Think Bailout Is A Scam
Is there an American alive who doesn't know that the government bailout of the financial industry is complete BS by now? Everyone knows that the way the bailout was rushed could only end in disaster. When you're forced to make a decision involving $700 billion, it should be done with only the greatest care. Instead, Congress and the Bush administration rushed $350 billion out to the banks, and bought up assets that are now being determined money.cnn.com/2009/02/05/news/economy/tarp_oversight_hearing/index.htm “>to have been overpaid for. Uncle Sam paid $254 billion for assets that are now valued at $176 billion.
This is the exact reason reasonable people don't want their government going into business! If companies are already having such a tough time making money in the current operating environment, then what possible chance is there that blowhard politicians are going to do a better job of allocating capital?
Whatever happened to the good old fashioned tradition of having your ass handed to you in business? Small business men of America certainly know what I mean by that. If you take out an SBA loan and guarantee it personally and your business fails, you don't get bailed out. Instead you get your wages garnished and your home foreclosed on. Only in the world of asymmetric compensation can you screw the pooch and still get paid a bonus.
Companies such as Bank of America (NYSE:BAC) , Citigroup, Wells Fargo, and Capital One have all received enormous amounts of fresh capital from the government, and only now are there serious discussions going on about whether major restrictions have to be placed on the money. Of course they do! These are the foxes guarding the hen houses, after all. Is it really so hard to believe that bank leaders will lie when confronted with billions of dollars of losses? History has proven what any thinking person already knew. When push came to shove, the bank execs are primarily concerned with bailing themselves out.
Politicians are cluing in now about the bailout, because they're finally getting the message from their constituents about how they feel about this fiasco.
"At various points Treasury has articulated policy objectives which could result in a program involved in paying substantially more for investments than they appear to have been worth at the time of the transaction," said Elizabeth Warren, head of the Congressional Oversight Panel . "The American people want to know what's going on and they deserve answers."
You're damn right we do. If you're 1 day late on a Capital One credit card payment, you better believe they want answers. Miss a payment on your Bank of America (NYSE:BAC) loan and they'll want to impose sanctions on you. Would it be so much to ask these companies where the billions went? And while we're asking questions, we might want to find out when they plan on lending to credit worthy customers again. That was the original point of the bailout (using our money) in the first place.
Investors have certainly seen the light. BAC is trading at $4.73 per share today, the lowest share price in 21 years. Citigroup is selling for $3.59. WFC and COF are doing a bit better, hanging on to double digit valuations. For now.
If these financial institutions don't shape up they're likely to be shipped out. Americans might not always be the quickest to catch on to scams, but when they do, watch out. This bailout promises to linger for years as an example of just how out of touch Wall Street really is with Main Street.
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