On October 24, 2011, Occupy Oakland protestors stormed a Chase Bank, vandalizing the bank, terrifying customers and chanting "Banks got bailed out. We got sold out." They then tried to storm a Wells Fargo Bank but the bank locked its doors. From the Occupiers to the Main Stream Media, the myth that banks got bailed out continues. Even Bill O'Reilly in the so-called No Spin Zone repeated the myth last night while reporting on the Occupy Oakland raid on the banks.
Here are the facts: TARP (Troubled Asset Relief Program) was instituted in October 2008 to promote stability in the financial markets. Under the program, the federal government essentially lent money to the nation's banks through various types of transacations. The banks were required to repay the funds at the usurious rate of 15%.
TARP was also used in 2008 to bail out the insurance giant American International Group (AIG), and later during the Obama administration to bail out General Motors and Chrysler.
The Congressional Budget Office issued a report on TARP in March 2011. The results? The financial institutions (banks) who were lent funds from the Treasury repaid those funds with interest so that taxpayers have earned 9 billion dollars from the banks who took TARP money. The CBO report states:
Here are the facts: TARP (Troubled Asset Relief Program) was instituted in October 2008 to promote stability in the financial markets. Under the program, the federal government essentially lent money to the nation's banks through various types of transacations. The banks were required to repay the funds at the usurious rate of 15%.
TARP was also used in 2008 to bail out the insurance giant American International Group (AIG), and later during the Obama administration to bail out General Motors and Chrysler.
The Congressional Budget Office issued a report on TARP in March 2011. The results? The financial institutions (banks) who were lent funds from the Treasury repaid those funds with interest so that taxpayers have earned 9 billion dollars from the banks who took TARP money. The CBO report states:
"To provide support for financial institutions, the federal government disbursed $313 billion, most of which has already been repaid, and is projected to provide an additional $2 billion (see Table 2). CBO estimates a net gain to the government of $9 billion from those transactions."
Of course, TARP overall has lost taxpayer money, but not from banks. The cost to taxpayers on the AIG subsidy is 14 billion, and the GM and Chrysler bailout cost is another 14 billion, according to the CBO. But the Occupiers won't storm GM or Chrysler because those TARP funds were used to bail out the United Auto Workers. Unions are financial supporters of the Occupy movement, so the protestors won't turn on their benefactors. Banks, on the other hand, are easy targets because they are seen by the public as the bad guys. The problem is that banks are essential to build a thriving economy, and demonizing banks will hurt our economic recovery.
We were at a forum with Rick Santorum, where one community banker said that the regulations imposed -- I think in the wake of the 2008 crisis -- have hamstrung banks as well so that they cannot make loans to small businesses -- there is too much risk for banks.
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