I have written here on BiggerPockets extensively on the complete lopsidedness of the banking bailout and how the preference was given early on to helping Wall Street fat-cats over Main Street foreclosure victims. The bailout bill created the Trouble Asset Relief Program (TARP), funded it with $750 Billion of which about $350 Billion still remain in the hands of Barney Frank, the House Financial Services Committee and their Senate counterparts. The first allocation of the assistance or about $300 Billion, focused clearly on the banks or bank holding companies to get and keep them solvent.
Flawed Legislation Pushed by a Deeply Flawed Congress
This was all done by Congress in hurry to stave of a “banking crisis”…a crisis that never occurred. After TARP spending topped out so far at $350 Billion, is now deemed to be a rather poor performer…leaving most in Congress and the public to believe (rightly in my opinion) there was never a crisis in the first place.
Further more, the banks once in receipt of this enormous amount of money did absolutely nothing with it that the public and Congress expected…i.e. loosen a frozen credit market and start lending again. Instead they opted to horde the money or pay executive bonuses. This cavalier banking industry attitude lends further to they belief there was never a “crisis” and therefore, should never have been given a taxpayer funded bail out.
TARP Rescued by Barney Frank? Don’t Bet on It!
One of the most outspoken critics of the TARP (even though he was instrumental in getting it passed) for it’s clear lack of help for foreclosure victims, was Barney Frank, the Chairman of the House Financial Services Committee. TARP was passed with very little Congressional oversight which was one of the flaws which allowed Treasury Secretary Paulson to blow the first half of the TARP funds getting nothing for it. The only real oversight was the provision the Treasury would have to come back to Congress for authorization on the second half of the appropriated funds or about $350 Billion.
Now the ball is back in Barney Frank’s court…he could correct the shortfalls he complained about initially. Now Frank has more time and a like-minded “look out for the little guy” Obama administration, so he could show us just how much he really cares about home owners in trouble by mandating the remainder of TARP will be used to help foreclosure victims.
Did he do that?
Of course not!
The legislation to help home owners Mr. Frank proposed today allocated only $50 Billion of the remaining $350 Billion…less than 15% of the money left!
Like all legislation, if they don’t fund it, they might as well not pass it.
This $50 billion is a pittance compared to the “useless” money thrown at the banks and AIG… and it’s now clear to me the Obama-Frank combo is going to be just as callous to troubled home owners as the Bush-Paulson duo.
Did you really expect anything to change?
Silly rabbit, tricks are for kids!