It’s really impossible to know just exactly how much money the government has dished out to failing economic institutions to keep them afloat. Many critics from both sides of the political debate bristle at this, but we are told that these institutions are just too big to fail. They must be kept afloat with an infusion of taxpayer dollars to avoid an even greater economic catastrophe. OK! So we throw money at them and they put that money in their collective pockets leaving the taxpayer with nothing to show for their investment. No businessman would ever make such an investment with their stockholder’s money!
Now we have an administration that, at the very least, believes that that if a company takes taxpayer money then it should be responsible to the taxpayers. And the taxpayers don’t want their money used for executive bonuses or expensive vacation. Apparently some banks believe that taking the money is not worth it. According to the New York Times, many banks want to give the money back because the regulations are too stringent.
This begs the question, if you absolutely, positively needed the money to avoid collapse, how can you afford to give the money back? Could it be that banks like Goldman Sachs and Wells Fargo, two banks offering to return the money, didn’t really need the money but took it anyway? Nah! That would be dishonest. Why would they do such a thing.
According the C.R. Cloutier, President of Midshouth Bank of Lafayette, his bank took $20 million from the taxpayers because they saw it as their “patriotic duty.” Yeah C, it’s my patriotic duty to take $20 million as well. In fact, my patriotic duty comes cheap. I’d settle for half of that.
OK. So you don’t want the regulations. Great! What’s keeping you from giving the money back. One banker suggested that his bank will return the money as soon as the government establishes a means of receiving the money. Yeah, because the government has no means of receiving large sums of money! Hope they get that problem solved by April 15th.
Come on! I tell my students that if you are going to accept someone’s money then you are also accepting their ideology. That was fine by the banks in October when the ideology was “do what you want,” but now the people are demanding that financial institutions be accountable. Maybe even one day it will be required of them to be as accountable to us as we are to them when they loan us money.