TARP II: Banks and Business Don't Want It

For the good of the American economy I support

  • Much more government spending.

    Votes: 1 12.5%
  • About the current level of government spending.

    Votes: 0 0.0%
  • Less government spending.

    Votes: 1 12.5%
  • Much less government spending.

    Votes: 6 75.0%
  • None of the above and I'll explain in my post.

    Votes: 0 0.0%

  • Total voters
    8

Foxfyre

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The Senate has shot down the jobs bill for now, but President Obama isn't giving up. I think he doesn't think it has a snowball's chance in hell of passing, but it is just too juicy to use to demonize Republicans now that our Fearless Leader is back into full campaign mode. On the bright side, it doesn't leave too much time for presidenting when he is campaigning.

But there are some points he is making that we all should be educated on before buying into the "GOP are heartless, ruthless, greedy, hateful monsters" rhetoric.

One is TARP II and how it is being played by the left, most especially the Obama campaign organization:

President Obama is crowing about his small-business bill, signed into law on Monday. "It was critical that we cut taxes and made more loans available to entrepreneurs," he said. Trouble is, small businesses and community banks don't want Obama's $30 billion program. That's right. They don't want it.

An AP story quotes community bankers who do not want the Treasury Department or other federal agencies to own stock in their banks. They know the regulatory takeover risk that will come with this program. Next thing you know, the government will order banks to make unaffordable mortgages available to low-income folks, or perhaps force business loans on the basis of race or gender.

Triumph's Chase also said that his "business customers are mired in uncertainty and are reluctant to invest in their businesses." Chase is onto something. According to the National Federation of Independent Business (NFIB), only 4 percent of small-business owners surveyed in August cited a lack of financing as their top business problem. And a full 91 percent say all their credit needs are met.

So what's the real problem? It's the economy, stupid. And it will get worse should the entire Bush tax-cut plan, including the alternative minimum tax, wind up in flames at year-end. If the Bush rates expire, an already sluggish recovery will be doomed. That's the real issue.

But Obama thinks his $30 billion mini-TARP will do the trick. Most folks may not know it, but as part of this plan, the Treasury would buy stock in the community banks that qualify, with those banks having to pay an annual dividend of 5 percent to the government. If those banks make loans to small businesses, the dividend payment might drop to 4 percent. But if they don't use the money for loans, the dividend payment becomes a penalty at 7 percent. That amounts to Treasury control of the small banks that play this silly game.

Who in their right mind would sign up for this? This is government-planning intervention almost beyond belief. . . .

RealClearMarkets - TARP II: Banks and Business Don't Want It
It simply boggles the mind that there is still a small but vocal political class who honestly believe the government does a better job for America than allowing the free market and individual liberty to work. I cannot see how anybody can believe that these days, but I'm sure we have some friends eager to educate us. :)
 
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Sallow

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:lol:

Businesses don't want money...

Got it. Like they refused it the last time around. Along with Governors like Perry and Jindal.

Hilarious.
 
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Foxfyre

Foxfyre

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Thank you for your opinion, Sallow. Now do you have any evidence to back it up?

Bear in mind that both Texas and Louisiana had a lot of tax payers who had paid lots of taxes. Should their governors have refused to accept some of that money back or should they have allowed all the other states to have the tax money their citizens had paid in and their people get nothing?

So show me where most businesses and banks want TARP money now.
 

Zander

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We need MUCH less government spending.I like the idea of freezing all federal spending at today's rates for the next 10 years. Why does every dept in the gov't need to increase spending by 4% every year? Freeze it.
 
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Foxfyre

Foxfyre

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We need MUCH less government spending.I like the idea of freezing all federal spending at today's rates for the next 10 years. Why does every dept in the gov't need to increase spending by 4% every year? Freeze it.
I don't think we an keep spending at today's rates. We are too close to the GDP and amassing deficits in the trillion dollar range as far as the eye can see. No way the GDP will catch up with that in the foreseeable future. We must scale back the spending to an amount much closer to what is actually coming into the treasury.
 

editec

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YOu want private business to handle this problem according to the Austrian rules of CAPITALISM?

Okay, I can understand that.

Let the banks write down their toxic assets without government guarantees then.

When ours all banks go belly up, don't bitch about the government.

The ONLY reason any banks are open now is because the FED and TREAURY is propping them up and not forcing them (as the rules of cpaitism demands) that they WRITE DOWN THE TRUE WORTH of their toxic assets.

What you are unknowingly calling for is the END of CAPITALISM as we know it.
 
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Foxfyre

Foxfyre

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YOu want private business to handle this problem according to the Austrian rules of CAPITALISM?

Okay, I can understand that.

Let the banks write down their toxic assets without government guarantees then.

When ours all banks go belly up, don't bitch about the government.

The ONLY reason any banks are open now is because the FED and TREAURY is propping them up and not forcing them (as the rules of cpaitism demands) that they WRITE DOWN THE TRUE WORTH of their toxic assets.

What you are unknowingly calling for is the END of CAPITALISM as we know it.
Please explain how the government taking money from the people to prop up irresponsible or insolvent banks and/or businesses even represents capitalism, let alone how not doing that will destroy capitalism.

How about we go back to a time when the government didn't pick winners and losers, beneficiaries and the 'also rans'; when the government regulated the banks to ensure that the people's money was as safe as possible, closed the bad banks, and otherwise let the free market work?
 
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