TARP is really a typo. It should be called TRAP because that’s what it is. Last year the Bush administration called together the heads of the top banks in the country and made all of them take TARP money whether they needed it or not. Those who politely refused were threatened with 5 year audits. By taking the money the government gained preferred stock in those companies and were able to order the bank execs around. Here is one example:
The US government threatened to eject the entire board of Bank of America if the firm pulled out of a $50bn (£34bn) takeover of troubled Merrill Lynch in December, according to new documents set to inflame a bitter shareholder dispute at America’s wealthiest bank.
In potentially explosive testimony to regulators, Bank of America’s chief executive, Ken Lewis, has claimed the US treasury ordered him to press ahead with a buyout of Merrill and to keep quiet about the Wall Street brokerage’s mounting losses.
Lewis’s account was revealed today in a letter to Congressional lawmakers from New York’s attorney general, Andrew Cuomo, who has raised concern that Bank of America’s shareholders were kept in the dark about liabilities inherited from Merrill.
Some banks want out of the TARP deal and have offered to pay back the money. The Obama administration has refused. And wants to convert their stock to general stock giving them more control and power over the banks. In effect, they are socializing the banks in a covert way. They are trying to control the financial side of the economy just as they are trying to nationalize the energy side, through excessive regulations.
Further, TARP is becoming a huge criminal enterprise as all massive federal bailouts become. The amount of fraud and corruption is already setting is alarm bells.
The Obama administration is using the economy as an excuse to do the inexcusable. They’re borrowing Trillions from the Chinese, which is like borrowing from the Mafia, and creating a deficit larger than the US GDP. While they do that, theyre hamstrining our financial sector, taking it over and doing the same to large sectors of the energy and manufacturing economies.
It’s all a disaster in the making.
UPDATE: Is TARP a criminal enterprise? Major duh.