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Repaying the Favor
October 24, 2010 - by Donny Shaw
The real problem with too-big-to-fail is that in a post-Citizens United world there is virtually no limit to the amount of money these enormous companies can spend on making sure their favorite lawmakers get elected. Too big to fail is primarily a political problem. It’s a self-perpetuating cycle whereby huge companies are allowed to grow indefinitely (i.e. not fail organically) because they have the financial muscle to buy-off the lawmakers in a position to protect them from regulation and bail them out when they get into trouble.
Not surprisingly, in this election cycle, companies that have taken money from the 2008 TARP bailout are focusing their political giving on candidates who support the bailout, oppose new financial regulations, and are most likely to be in positions of power in the next session of Congress. The Washington Post reports:
The two top recipients of money from companies receiving TARP funds are the top two House Republicans, Minority Leader John A. Boehner (Ohio) with $200,000 and Republican Whip Eric Cantor (Va.) with $187,000. They are followed by the ranking members of two key House committees, Spencer Bachus (Ala.) on Financial Services and Dave Camp (Mich.) on the tax-writing committee.
All four of these Republicans split from the majority of their party and voted in favor of the 2008 bailout. They also all voted against the financial reform bill that imposes new regulations on financial companies and attempts to prevent future bailouts. As far as the TARP recipients are concerned, these are their key allies for the next session — powerful Reps. who are most likely to lead their party against new regulations and in favor of more bailouts when the time comes.
Picture above is Minority Leader Rep. John Boehner [R, OH-8].
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It makes you wonder if their financial trouble was actually a smoke screen for expediency like the search for the WMDs. They had rushed through the TARP before President Obama had gotten in. These companies had said due to mismanagement they where failing. Yet soon after receiving the bailout they were giving out bonuses. And now these companies are miraculously able to turn around in the span of about two years and now are profitable that they are giving out money. What speedy economic turnaround.
Consider most of these companies are monopolies. They get subsidies, tax credits, take insurances out against their employees and against loss and have tax shelters in the Cayman Islands.
There`s a story I heard as a child, about a scorpion and a frog, you may know it. It takes place at a pond and the scorpion wants to go to the other side, so the scorpion asked the frog to give him a ride, but the frog tells the scorpion “I DON`T TRUST YOU”, and the scorpion reply`s, surely I won`t do anything to harm you, I simply need a ride. Well the frog thought about it and agreed to give the scorpion a ride, as they reached the middle of the pond the scorpion stung the frog in the back, and the frog screamed out WHAT HAVE YOU DONE, NOW WE WILL BOTH DIE, and the scorpion said, I can`t help it , it`s in my nature.
you said that it is a no limit amount. why? Don’t you have a certain budget? cleaning services
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Definitely worthy to read. I can say that that is not repaying the favor but that is just normal with politics.
arbitrage portfolio
Yet soon after receiving the bailout they were giving out bonuses. And now these companies are miraculously able to turn around in the span of about two years and now are profitable that they are giving out money. Floppy to usb Well the frog thought about it and agreed to give the scorpion a ride, as they reached the middle of the pond the scorpion stung the frog in the back, and the frog screamed out WHAT HAVE YOU DONE, NOW WE WILL BOTH DIE, and the scorpion said, I can`t help it , it`s in my nature.
This is a sad day and time for the people of the United States of America… With greed as our guide we have no where good to go… Divided we fall.
I could not agree with you more, these are very sad times. Some have asked, whats happened to the American dream, well it came true ! And it looks as if were going to jump from the pan into the fire. I can`t believe so many Americans have short term memory loss, and want to hitch their hopes on the Republican agenda, I can already smell the smoke of a past civilization once called America.