Banks repay TARP funds, government bailout of Wall Street continues

[Hannah Bell]

Fourteen months after Congress authorized the $700 billion Troubled Asset Relief Program, the Obama administration is allowing the last of the big banks to repay their TARP funds and escape the token restraints on executive pay and bank operations that were imposed in return for the taxpayer bailout.

The Times continued: “The truth is that the taxpayers are still very much on the hook... Their (the banks') trading earnings are financed by more than a trillion dollars’ worth of cheap loans from the Federal Reserve, for which some of their most noxious assets are collateral...

...The banks have used their government handouts to boost their profits and further enrich their executives, big shareholders and creditors. They have refused to expand their loans to small businesses and consumers, contributing to the worst jobs crisis since the Great Depression. They have refused to sell off or write down their bad assets, confident that, in the end, the government will make sure that they are able to palm them off at top dollar, or, in extremis, bail them out again.

A good portion of the banks’ revived profits have come from the systematic and open gouging of the public. They have jacked up interest rates and fees on credit cards, imposed higher fees on checking account overdrafts, and gamed the foreclosure crisis in order to profit from the tragedy of families driven into homelessness and destitution.

The government has refused to enact any genuine reform of the banking system. The free rein for Wall Street that is the outcome of decades of deregulation remains intact. The central feature of Obama’s financial regulatory overhaul is a mechanism to more easily and smoothly carry out government bailouts of major banks and financial companies in the future.

http://www.wsws.org/articles/2009/dec2009/pers-d18.shtml