Bailout Bonanza

Back when the banking industry bailout was first announced, Jazz and I commented on our Blog Talk Radio show that bailouts without any kind of constraint on how the money was spent was a very, very bad idea. But the all-knowing, all seeing experts in Congress (and both candidates for President) decided that it was best not to put any oversight into how that money was spent. Now Congress and President Obama are upset with how some of these banks are spending their bail out money.

Obama cited “the reports that we’ve seen over the last couple of days about companies that have received taxpayer assistance, then going out and renovating bathrooms or offices or in other ways not managing those dollars appropriately.”

While Obama didn’t mention any individuals or companies, his comments followed reports that John Thain, the former Merrill Lynch & Co. chief executive officer ousted yesterday, spent $1.2 million redecorating his downtown Manhattan office last year as the company was firing employees.

and

Beleaguered Citigroup is upgrading its mile-high club with a brand-new $50 million corporate jet - only this time, it's the taxpayers who are getting screwed.

Even though the bank's stock is as cheap as a gallon of gas and it's burning through a $45 billion taxpayer-funded rescue, the airhead execs pushed through the purchase of a new Dassault Falcon 7X, according to a source familiar with the deal.

While on one hand it is rather amusing to see the feigned expressions of outrage over the expected (by anyone with an ounce of common sense that is) continued mismanagement of "free" money given with no oversight to executives who have a history of mismanaging their investors money, it is rather annoying and more than a little disingenuous. I mean really - what DID Congress expect? Did they really expect these executive leopards to change their spots just because there were a few federal dollars involved in the mix?

Now to be honest, the money spent on both of these projects are stimulating the economy. Architects and builders and contractors had to be hired to work on the Merrill Lynch remodel project - contractors and builders that are really hurting right now. Those monies went to pay salaries for tradesmen who used that money on necessities like food and the like. The monies that would have gone toward that jet (CitiGroup has since decided that maybe that was not a wise use of the money) would have paid mechanics and engineers who again would have used it in shops for food, clothing or whatever for their families.

However well intentioned the folks at Merrill and Citi were (and I don't believe for a moment that they were), TARP funds were not meant for this kind of use. TARP funds were designed to be used to buy up residential or commercial mortgages and/or securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before March 14, 2008. Neither of the above uses falls into that category.

Everyone in Congress and the White House is mad that this money got spend the way it did and they are whining about lack of oversight. HELLOOOOO you guys had the power to instill oversight and YOU shirked your responsibility to the people and now you want to complain about how the money was spent? How about you guys do your jobs for once - instead of running around "doing something" how about doing the RIGHT thing for once....