Does anyone remember the summer of 2008 when Senator Chris Dodd stood in front of the nation telling us the urgency of averting a financial meltdown and that we had to infuse our banks with taxpayers’ money? That was over $800 billion of our money to help the Wall Street, the perpetrators of the disaster and a four-page document to secure this bailout money aka TARP. The first batch of funds from government came with no condition to all the banks including the weak, the strong, the anemic and the healthy ones because the government did not want to stigmatize banks like CitiGroup, J.P. Morgan/Chase. You will be pleased to know that these banks including Bank of America are now making money judging from the dividends and bonuses distributed by them in the past two years or so.
Does anyone remember what was said then about mortgage under water, never mind that CNBC reporter who suddenly felt it was bad for government to help those with mortgages under water because he righteously claimed that it was not fair to those who were paying their mortgages on time? The same argument recently proffered by Bank of America’s chief executive, Brian T. Moynihan, who told the attorneys general in April 2011 that cutting principal for current borrowers would send the wrong message to all those who have struggled to pay their bills. His counterpart at J.P. Morgan/Chase, Jamie Dimon, bluntly said it was “off the table.” But I did not hear the same argument about helping these banks in 2008; after all there were those healthy banks. Was it fair for government to help these banks at their hour of needs?
Too Big to Fail and Too Big to Care Part 1
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