Bankers defend bailout: 'We used different money for bonuses'

Posted Feb 12th 2009 4:00PM by Zac Bissonnette
Filed under: Management, Financial Crisis

The CEOs of the big TARP-backed banks appeared before the House Financial Services Committee yesterday to talk about the bailout and basically endure a few hours of awkwardness.

The Associated Press reports that "Anticipating confrontations over their own compensation, several asserted that none of the government's money went to bonuses or dividends" in their prepared remarks.

"None of the government's money went to bonuses or dividends?" What does that even mean? It was "different money"? "Oh, don't worry. We used that cash to lend to people. We used other cash to pay bonuses." Well if they had other cash to pay bonuses, why did they need our cash in the first place. It would all be very confusing except that it isn't: It's garbage.

The argument from the banks goes something like this: You send your fifteen-year-old to the convenience store to buy milk and eggs and he comes back a six-pack and a copy of Hustler instead. But don't worry, he explains: "I used different money to pay for this stuff. . . No, you can't have the money you gave me back. I need it!"

That is literally the argument that these CEOs are trying to make and if our elected officials let them get away with it, then there really is no help for an economic recovery package that is also mindful of the value of taxpayer money.

Tags: Bailout, bonus, tarp

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Reader Comments (Page 1 of 1)

2-12-2009 @ 4:31PM

William Cunningham said...

Please see:

Plan to restore stability to "our" financial system

http://twisri.blogspot.com/2009/02/plan-to-restore-stability-to-our.html

A People's Guide to the Economic Recovery Advisory Board

http://twisri.blogspot.com/2009/02/peoples-guide-to-economic-recovery.html

2-12-2009 @ 4:18PM

ben said...

So in other words, they can still give the bonuses without the bailout? right?

That's good to know.... oh wait....

2-12-2009 @ 6:08PM

thedude said...

The answer is NO!!!!! There is no such thing as an economic stimulus package that is mindful of taxpayer money.

Where do you think the money is coming from? Sure it is called the National Debt but who is that debt owed to ?

I'll give you two guesses and the first one doesn't count.

ennhhh ! Wrong guess ! That money is owed to China for financing these buyout programs. That's right your government is selling your freedom to a communist regime. The only question is who started it, Was it Nixon or Clinton ? My bet is Clinton as during his 1st term as President I was still able to buy US made good and by the middle of his 2nd term (right about when he was being IMPEACHED) most manufacturing had been outsourced.