Weren’t We Supposed to be Making Money?
Let’s see … weren’t the government “investments” in failing firms supposed to pay off for the taxpayers? Alas, it’s not looking good so far. Writes Stephen Gandel in Time:
Two months in, and already $16 billion in the hole. That’s how much the Treasury’s Troubled Asset Relief Program (TARP), which was approved by Congress in early October, has already lost on its investments, according to a TIME analysis. (Read the top 10 financial collapses of 2008.)
The investment losses are sure to rankle lawmakers already unhappy with the way the Treasury has handled the first stage of the $700 billion financial-rescue plan. In a hearing on Wednesday, members of the House Financial Services Committee said the Treasury has not done enough to slow foreclosures, increase bank lending or protect taxpayers’ money. Lawmakers questioned Assistant Treasury Secretary Neel Kashkari on why his agency had not yet hired an outside firm to help manage its investments. They also wanted to know whether the Treasury Department had set a limit on executive compensation at the firms in which Treasury has invested, which lawmakers say was required in the early-October bill. Lawmakers are concerned that financial firms receiving TARP funds will use that money to pay executive bonuses or pursue mergers instead of making loans.