And as soon as team Obama took the WH they changed the rules of the game pissing off the banks who felt like they had been sucker punched. They proceeded to repay tarp loans as fast as possible to eliminate the authority that being on the hook for those loans gave team Obama over their salaries and business practices.
Ask any banker; under Bush TARP was a bailout, under Obama it became a Trojan Horse.
Obama was pretty smart to light a fire under the feet of those TARP recipients. It's amazing how fast they want to pay the taxpayer back since Obama converted non-voting preferred shares to voting stock. Yet, it had the right wings' panties in a collective wad, with shouts of Obama's secret socialist plan to take over industry.
I also think there was enough "moral hazard" fear in the bailout, between Bear Sterns failing, and Lehman Brothers being gobbled up for chump change.
Good point. So maybe a way to reduce the moral hazard of bailouts is to attach a bunch of inconvenient strings to the package, making a bailout so unattractive to the recipient that bankruptcy would seem the better option.
Exactly.