Image: flickr.com via 37108241@N00
Unlike payday loan recipients, who must pay back their emergency cash by a specified date, the banks who received bailout money aren’t being held accountable.
Individuals who get small amounts of emergency cash through a payday loan are required to pay it back as soon as possible. But institutions that received chunks of the $700 million government bailout aren’t paying it back any time soon. They also aren’t saying where it went.
The questions
In an article by Matt Apuzzo:
“The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what’s the plan for the rest?”
The AP reporters who set out on this quest returned with zero specific answers. Below are some of my favorite responses.
The answers
“We’ve lent some of it. We’ve not lent some of it,” Thomas Kelly, spokesman for JPMorgan Chase, which received $25 billion.
“We’re not providing dollar-in, dollar-out tracking,” Barry Koling, spokesman for SunTrust Banks Inc., $3.5 billion.
“We manage our capital in its aggregate,” Tim Deighton, spokesman for Regions Financial Corp., $3.5 billion.
SAY WHAT?! Any readers who can explain that last one to me, please proceed. I mean, I know the definition of the word aggregate, but how does this explain anything?
Payday loans vs. government bailouts
Payday lenders get quick cash to customers, but they expect the cash to be returned. Would companies who received government bailouts be more conscientious with their emergency cash if they had to pay it back?
Payday lenders hold people responsible for the money they borrow. Everyday, responsible citizens are capable of paying back the emergency cash they get from a payday loan. Why aren’t companies who borrowed billions being held accountable?
Bailout buzz
I managed to find out where part of the money went. An article at Clusterstock (http://clusterstock.alleyinsider.com/2008/12/16-billion-of-your-tax-dollars-straight-to-bailed-out-bank-execs) says $1.6 billion went to paying the salaries and bonuses for bank executives. (You know, the guys who have private jets and personal chefs.) I guess running a company into the ground is hard work.
Excuse me, middle man, you’re in my way
JPMorgan Chase says it plans to lend $5 billion to nonprofit and health care companies next year. Does anyone else see what’s wrong with this picture?
These financial giants don’t have a plan for paying the money back anyway. Couldn’t the government have just given the money to those programs? You know, programs that actually help people.
Hey, that’s my money you’re being vague about!
So JPMorgan is lending money to nonprofits and health care companies. And then what? The do-gooder companies will have to pay it back. That is the way loans work.
So when JPMorgan gets its money back from health care and nonprofit programs, will they give it back to the government? Will it make its way back to taxpayers? Who knows. The bailout turned out to be an action plan that was all action and no plan.
I think in the future maybe the government should look to payday loan companies as guidelines for how to hand out emergency cash.
Should of been lent to the small community banks who were not carrying all this toxic paper. They would be more likely to to lend it to those in their own community that they know and trust to pay it back.
I don’t think that the bail out money should be handle the same as payday loans but i do agree that the bail out money needs to be stipulated to certain activities with in a company like in a Bank it should be used for lending and only lending so we can help people out and doing so it boosts the economy.