First I must address the two items from the comments before I finish off the subject. TenMile: You are correct. I made the mistake of inferring the government should be making money. The correct statement would have been to mention how they run deficits in the trillions by spending uncontrollably. The government should not be making a profit.
Alan: You may be right. I may be crazy but I think most people don't care about the banks. In fact, most people have no idea what is really going on. They just know of what they read about in the papers or hear on the television. Sadly, those reports do not give the full picture.
Which leads me to the final 2 comments about banks getting TARP money. A number of banks did not need the money but took it because it made great business sense. Pay the government 5% instead of investors 6 or 7%. Get the money from the government and save tens of thousands if not hundreds of thousand (we are talking billions here) in underwriting fees. Take the money from the government and pay less in interest and have no costs in receiving it. DEAL! It would be the same as someone coming to me right now and offering me a 30 year mortgage at 3.5% with no closing costs. You do not have to pay for any title transfers, inspections, etc. Would you not take it? Hell, I would take it in heartbeat and ask for as much as I could get. At least twice what I could possibly get. I would take the extra cash and buy bank stocks (after considerable research) yielding over 8%. I would be happy to take the risk on the capital to skim the 4.5%.
That is what some of these banks did. They took the money at a cheap rate and have used it to loan out. Sadly Congress did not do their homework and learn what they were doing before trying to belittle them. Worse, Maxine Waters had the nerve to condemn these banks for making money on those loans. Hey Maxy, that is what banks do you moron!
Second, when these banks sold securities to the government, they did not suddenly give day to day operations to either the U.S. government or the American taxpayer. These securities did not magically give people a say in how to run their businesses. Why do people think that?
Most people have some form of loan. Whether it be a mortgage, car or student loan, credit card, etc. You work and make your monthly payments. You have money left after paying all of your bills. Does the company that lent you the money have a say in what you do with the extra? Should they tell you not to go on vacation? Or go out to dinner? Or buy a video game system for your children? Of course not! It is your money, you can do what you want. But you borrowed money from them and if you think you should condemn a bank for wanting to reward its hardworking employees then maybe you should think twice about spending money on your own rewards when you have borrowed money from someone else.
I forgot to mention this dream I had earlier this week about my mom's house. I was over at her place fixing something when I got to talking to the neighbor. He asked if I was going to fix the hole in the roof. I asked what hole as I looked at the front of the house and saw nothing but a perfectly fine roof. He motioned to the side. I walked to the side of the house and saw nothing but a frame. The entire side and back roof of the house was totally gone.
But that wasn't the weird part. By looking through where the roof should have been, I noticed the football stadium behind the house. Right behind my mother's house was a gigantic stadium, towering over her residence. I looked it perplexed, wondering when they built that thing.
I need a beer. Something full bodied. A nice Imperial Stout. If I can find one of the Russian variety I will be happy. Just need to make it through 8 hours...