TARP: Why The Media Doesn't Need Every Detail

I understand that media outlets like the Boston Globe are completely within their rights when they ask for the list of which banks got TARP money and which were turned down. I can even understand why reporters might be disappointed when the list arrives from Treasury with the turn-downees’ names blacked out.

But, please! Spare me the puffed-up quotes about the investment community’s “right to know.”

Reporters can’t be expected to understand all the details of how the banking business works. But they should at least realize this much: any bank whose customers find out was turned down for TARP money will very likely face a serious run on deposits. That would not be good.

In fact, it would be the opposite of good. The feds are trying to strengthen the banking system lately, not weaken it, remember? As it is, the FDIC is already up to its ears in bank failures. The last thing the government needs to be doing at his point is manufacturing additional, needless ones, for the sake of "transparency."

Some questions really are better left unasked. . . .

Comments

[whisperonth...:]

The media doesn't seem to realize that this country has been short on hope lately, and we're running out of change. If people believe there is an end, they will keep trying. The media wants to keep shoving us back into that pit of despair. Thank you for reminding them. They won't listen, most likely.

Sep 17 08:59 AM

[bindlepete:]

Arrogant and shortsighted. Follow the law and tell the truth. Quit playing games as these too complex banker games have nearly destroyed us and stolen the public's money and credit.

Sep 17 09:20 AM

[chinooking:]

idiot

Sep 17 09:24 AM

[User241885/...:]

Anyone who survived reading the post above can be assured that mine will not do anything more than address the basic issue raised by this article: is any company too-anything-to fail?

The recent activist movement in our government is an end-run on well established rules from both capitalist values and corporate jurisprudence which have already dealt with the concept of giving the flailing entity a second chance.

The question is how much coddling is necessary before we let the patient's diagnosis run its course? The USA has nearly 4,000 banks. Does each and every one have a constitional right to survive a financial crisis, especially where their own actions contributed to bring about their current problems? Canada has less than 50 banks, none of which are experiencing the problems to the extent ours are. Maybe 4000 banks is too many in this environment.

And what is the price we pay for this coddling? Each and every tax dollar is just the tip of the iceberg in terms of the real money needed to fund that relief. A recent SA article pegged the $8,000 first time home buyer tax credit at $43,000 per house. My guess is that the mortgage modifications also carry a similiar math, not the kind of multiplier effect one typically associates with banking.

Cash for clunkers is another good example of unfortunate activism. Take a ride through a dealership and go to the area of the parking lot where all the cars have the word "Clunker" grease-painted in the window. Some of these cars are only three or four years old. They are waiting to have their oil lines flushed with solvents at which point the engines are to be run until they sieze up and are made worthless.

So for the sake of pumping up sales for manufacturers and dealers, who were already on the terminally ill list, we take away business from the local independant repair shop, the second hand parts guy, and the engine rebuilder, all sustainable businesses that are even more successful in recessionary times.

Why should banks be any different? Paulson gave them a life-line when things looked their bleakest, but now we need to let the barely marginal firms meet their fate instead of siphoning off our funds that should have been put to our future through investment. I would not invest in a failing fiinancial company that had little or no chance of surviving what promises to be a challenging environment for financials going forward. Why should we all be so forced?

Maybe the Treasury SHOULD publish the list of banks that did not get TARP funding. We have gone too far protecting every business that benefitted from the easy credit, massive liquidity and slight whiff of fraud perpetuated by both business and politics.

We don't need any more new and innovative approaches to dealing with the problems of recessions and business failures. We have the laws already that were properly drawn the last time we had to craft a solution for failed companies. We just have to enforce them rather than needlessly providing these tortured life support solutions to critically ill firms. We do this for no other reason than the fact they are making the healthy firms sick as well.


FAMCO

Sep 17 12:35 PM

[granger:]

the newspapers would not have ask if capitalism was allowed to run its natural course, we would all the names all ready

Sep 17 04:12 PM