TARP Is Over, But The Bailouts Will Continue Until The Big Banks Are Broken Up - Robert Reich/HuffPo

[WillyT]

TARP Is Over, But the Bailouts Will Continue Until the Big Banks Are Broken Up -- and Washington Knows It
Robert Reich - HuffPo
Posted: 01/09/2013 10:50 am

<snip>

TARP -- the infamous Troubled Assets Relief Program that bailed out Wall Street in 2008 -- is over. The Treasury Department announced it will be completing the sale of the remaining shares it owns of the banks and of General Motors.

But in reality it's not over. The biggest Wall Street banks are now far bigger than they were four years ago when they were considered too big to fail. The five largest have almost 44 percent of all U.S. bank deposits. That's up from 37 percent in 2007, just before the crash. A decade ago they had just 28 percent.

The biggest banks keep getting bigger because they can borrow more cheaply than smaller banks. That's because investors believe the government will bail them out if they get into trouble, rather than force them into a form of bankruptcy (as the new Dodd-Frank law makes possible). That's why it's necessary to limit their size and break up the biggest.

Washington may be getting the message. A few months ago Dan Tarullo, the Fed governor who specializes in bank regulation, proposed capping the size of the banks' balance sheets. Some former titans of Wall Street are saying much the same thing. Even Sandy Weill, who created Citigroup (which required $445 billion in TARP loans and asset guarantees) is proposing the biggest banks be broken up.

The new Congress may also be supportive...

<snip>

More: http://www.huffingtonpost.com/robert-reich/tarp-is-over-but-the-bail_b_2439844.html

[banned from Kos]

1. There won't be any more bailouts.

TARP is toxic.

The left and the right hate it now.

Reich is wrong.

[WillyT]

6. Wait... Let Me See If I Understand You... If We Suffer Another Crash... That Threatens The...

Entire World Economy... The PTB Are Gonna Just Let That Happen ???

[KansDem]

2. "...completing the sale of the remaining shares it owns..."

The Treasury Department announced it will be completing the sale of the remaining shares it owns of the banks and of General Motors.

If the Treasury Department owns these shares, might one assume it owned many more shares and if so, didn't that mean the American people owned these shares?

Why did we, the American people, simply hang onto what we owned and benefit from the profits?

[banned from Kos]

4. WE did. Taxpayers profited $21.7 billion off AIG stock alone.

(all sold)

[KansDem]

7. But if we kept the shares, then we'd all be shareholders!

We could elect a board of directors and appoint a CEO. We'd could either divide up the profits or use them to support education, job creation, social services and the like.

Maybe a little profit-sharing "bonus" once in a while! We could be lighting our 50-cent cigars with $100 bills!

[davidn3600]

3. The big banks own the system

The government will just bail them out again when the next bubble bursts because these banks are "too big to fail."

[elleng]

5. Sure hope so.

Kick