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Report gets to root of TARP spending
Neil Barofsky, special inspector general for the Troubled Asset Relief Program
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TEXT OF STORY
Steve Chiotakis: The Troubled Asset Relief Program or TARP has doled out more than $300 billion so far to banks. We're getting a better idea of how banks are using that money. TARP watchdog Neil Barofsky is out with a new report today. Marketplace's Amy Scott has more.
Amy Scott: Barofsky surveyed more than 300 banks that accepted bailout money.
Most of them say they've used some of the money to support lending. But they've also used it to help build up capital to protect against losses, pay off debts, and buy failed banks.
Barofsky wants the Treasury Department to require banks to report such information. But the Treasury has resisted.
Bert Ely: The problem is that it is not possible to say definitively how a particular dollar of a TARP investment has been utilized.
That's banking consultant Bert Ely. He says banks basically have a big pot of cash. Money gets dumped in from lots of sources.
Ely: And once the TARP investment gets dumped into that big pot of cash, then you can't track the flows after that.
Barofsky, the TARP watchdog, says his survey proves you can track the flows of money. The Treasury does track lending by bailout recipients. The latest shows that new loans increased slightly in May.
In New York, I'm Amy Scott for Marketplace.
On the commentary that "it's not possible to tell whether government dollars (TARP) were usedd for particular loans or other activities", this is a "dodge" on the part of the Treasury people to help their brothers on Wall Street.
Most corporate by-laws as mandated by the states are VERY CLEAR that funds are treated as a pool (which was said in the report). Therefore it is pretty simple. If the government (we the tax payers) made a contribution to these companies.. then our funds partifipated in ANY AND ALL TRANSATIONS as a percentage of the amount of capital that we contributed..
That is... If 10% of the Banks money is from TARP, then "We the Tax Payers" participated in all tranactions at 10%. OUr money payed for 10% of the loads... 10% of the purchases.... 10% of the BONUSES!
SImply put ... WE THE TAX PAYERS helped these BANKS with everything at a rate of 10%...
ANother way to look at it that is more difficult is to determine if the bank would have done something if it didn't now have the TARP money... If the answer is no, then clearly the TARP money made it possible....
The continued propaganda on the part of the banks to say what .... "well.. the TARP money doesn't matter cause we used other money.." is just PLAIN WRONG....
True, some of these banks may well not have failed.... but they also could not be doing what they are doing now .. without the TARP....
Course ... maybe they cried wolf.... so what do we do the next time?
