Failed-Bank Shareholders Reap Taxpayer Dollars
Raise your hand if you’re confused. First, as Congress and the Bush administration were haggling over how to structure an effective Wall Street bailout
Raise your hand if you’re confused.
First, as Congress and the Bush administration were haggling over how to structure an effective Wall Street bailout package, the Treasury Dept. claimed that forcing banks to suspend dividend payments to their shareholders would discourage participation in the voluntary program. So Congress caved, dropping that prohibition. (The compromise: Banks can pay dividends but not raise them.)
Now — as reports are emerging that banks are using enormous chunks of bailout cash to pay out shareholder dividends — the administration is blaming Congress for its failure to stop them.
Edward Lazear, chairman of the White House Council of Economic Advisors, told reporters Thursday that “what we’re trying to do is implement the law as Congress passed the law.”
“„The law was quite specific on what rules banks had to follow when they get the — when they get the TARP. And I don’t think it’s the proper role of the administration to change the will of Congress.
That’s an answer, but it doesn’t explain well why banks solvent enough to pay billions in dividends to shareholders need a government bailout. The Washington Post reports today that the 33 banks enrolled in the bailout thus far intend to pay out roughly $7 billion in shareholder dividends this quarter.
“„Companies generally try to pay consistent dividends and, at the present pace, those dividends will consume 52 percent of the Treasury’s investment over the initial three-year term.
Was this what Karl Rove had in mind for his “ownership society?”
Related
$1.3 trillion in federal spending unaccounted for, report finds
Despite calls for independent bodies to keep government accountable, the Sunlight Foundation’s most recent Clearspending report has found the federal
$1.89 billion given to states to fight HIV
The federal government Monday announced more than $1.89 billion in funding to states to fight the HIV epidemic with access to care and with more cash for the failing AIDS Drug Assistance Program. According to an HHS press release , $813 million of that money will go directly to the ADAP programming. An additional $8,386,340 will be issued as a supplement to 36 states and territories currently facing a litany of unmet needs and access issues.
1 Brigade and 1 Battalion
ISTANBUL – It’s 10 p.m. in the lowest level of the Istanbul airport. In 20 minutes I’ll be allowed to board my plane to Kabul, bringing me to the
1. Brian Schweitzer
As governor of Montana, Schweitzer doesn’t represent one of the most highly populated, high-profile electoral states in the country. But this
#1 in Conspiracy Theories
Andrew Young’s tell-all biography of John Edwards, hitting shelves next week, is surging in one Amazon.com category in particular. #1 in Conspiracy
$1 Million for Toomey
Pat Toomey, the former Club for Growth president and leading Republican candidate in Pennsylvania’s 2010 Senate race, has announced a $1 million haul in the
$1 Trillion for Fannie and Freddie?
That is the worst-case scenario, according to Egan-Jones Ratings Co., quoted in a Bloomberg article making the rounds. The agency says that if home prices
$1.3 Million for Brown
The GOP’s candidate in the Massachusetts special election raised more than one million dollars -- double the goal -- in a 24-hour moneybomb on the Ron Paul
Ten Loopholes That Can’t Make It Into FinReg
Dan Pfeiffer, the White House communications director, wrote a blog post that lists the loopholes lobbyists most want inserted into Sen. Chris Dodd’s (D-Conn.)
Bachmann uncomfortable over earmarks ban
Republicans appear to have boxed themselves into a corner with their portrayal of earmarks as wasteful spending, as many of them have backed a moratorium on
Troubled mine holds hope for U.S. rare earth industry
China currently controls 97 percent of the world’s rare earth production. The Mountain Pass Mine could change that -- if it can overcome serious environmental concerns.