How much have U.S. taxpayers paid to bail out Wall Street? Here are many of the details, but note that $2.02 trillion remains outstanding. Also keep in mind that the TARP payments were only 10% of the total U.S. aid given to Wall Street. Be wary, then, when you hear Wall Street crowing that it has paid back much of the TARP money. Dylan Ratigan puts the topic in perspective.
The big banks are taking the position that they have paid back most of money they received from taxpayers, so that they can go back to business as usual. Think Progress reminds us that paying back the TARP funds was the tip of the iceberg, and that the big banks are heavily in debt to taxpayers:
While most banks have already paid back their portions of TARP, as White House economic adviser Austan Goolsbee told CNBC, the government has not charged the banks for the huge emergency guarantees provided to them by the FDIC, nor for allowing investment banks to convert to deposit banks, which gave them access to loans from the Federal Reserve. Moreover, the entire sector has benefited from taxpayer help. The government has provided financial firms with trillions of dollars in low-interest loans and outright equity purchases through programs like the Federal Reserve's Discount Window and loan guarantees, and they also benefited from the bailout of AIG. TARP represents only a small portion of the total support for the financial sector, so even firms that did not receive funds under the program -- or have already paid back their portion -- owe taxpayers.This Think Progress post is link rich, in case you'd like to dig in deeper.
Author Les Leopold sums it up nicely, including the fact that TARP is only the tip of iceberg regarding taxpayer money being poured into Wall Street coffers. Merry Christmas to the big Wall Street banks, who work hard to . . . someone please remind me how these big banks to make the world a better place--what do they do for the economy or for productivity? Please tell me something more convincing than free market fundamentalism.
Elizabeth Warren has lots of bad news, the "stabilized" economy and the huge Wall Street bonuses notwithstanding. Warren is the Chair of the Congressional TARP Oversight Panel. Good for her, hammering on Henry Paulson's enormous bait and switch. Most of that TARP money was supposed to be used for loans for small businesses, not more gambling and bonuses, which is where it appears to have gone. Yet, according to Warren, there will "never" be a meaningful accounting of that money.
Elizabeth Warren is one of my heroes. Barack Obama appointed her to be Chair of the Congressional Oversight Panel created, which was established to oversee the banking bailouts. For many years, Warren has fought tough battles on behalf of consumers. [See the related posts to this post; and here's a video of Warren being interviewed by Jon Stewart that will give you an idea of what she is about (and especially consider Part II)]. Warren is now facing an incredibly tough uphill battle. Her main weapon is common sense. She wants to regulate banks and non-bank lenders, to stop them from defrauding consumers with their fine print, their outlandish fees and their arithmetical hocus-pocus. In a fair fight, her position should easily win the day. But it's not a fair fight, because the financial services industry owns much of Congress. Therefore, Warren has spent much time advocating for the need for a strong Consumer Financial Protection Agency (CFPA). Here's what Warren has to say about the need to regulate non-bank lenders:
There is more that we can do to deal with non-bank lenders, but only if Congress creates a strong CFPA. If we stick with the status quo -- which treats loans differently depending on who issues them and places consumer protection in agencies that consider it an afterthought - we know what will happen because we have seen it happen before. Lenders will continue their tricks and traps business model, the mega-banks will exploit regulatory loopholes, and the non-banks will continue to sell deceptive products. In that world, small banks will need to choose between lowering standards or losing market share, and they will still get too much attention from regulators while the non-banks and big banks get too little. Dangerous loans will destabilize both families and the economy, and we'll all remain at risk for the next trillion-dollar bailout. Regulating the non-banks hasn't been tried in any serious way. The CFPA offers a real chance to level the playing field, to add balance to the system, and to change the consumer lending landscape forever.