We know so little about how the $700 billion in bailout money is being spent and that was one of the complaints prior to its passage last October. The bill titled as the “Troubled Asset Relief Program” (TARP) was sold to the public as a means to unfreeze the flow cash and credit for besieged banks that lost over a trillion dollars in the sub prime mortgage meltdown.
Let’s take a quick look at how its working out. Merrill Lynch executive Peter Kraus received a $25 million dollar payout from TARP funds after working at the firm for only 3 months and he bought a 37 million dollar apartment with his money, oops, that would be YOUR money.
Merrill Lynch’s Board of Directors approved the lucrative contract for Kraus in May 2008 that paid him roughly $270,000 a day. This is insanity times 10!!! The B of D were idiots, no wonder MER was in such bad shape with watchdogs like this! After working for 90 days Kraus then left Merrill for the CEO job at AllianceBernstein and this is when he used his 25 million dollars to buy an apartment on New York’s Park Avenue for $37 million. #720 Park Avenue to be exact, the ritziest neighborhood in Manhattan.
Investment advisor Carl Spielvogel and his wife Barbaralee Diamonstein-Spielvogel bought the apartment just two years earlier for $18 million. They turned an 18 million dollar profit in 24 months during the worst real estate market in decades and that is an amazing story in itself.
Unfortunately for us, a whole lot of our taxpayer money has fallen into the hands of executives who were the same guys that destroyed and looted their companies and are now walking away with billions called golden parachutes thanks to your generosity. Peter Kraus is one such executive and he should be publicly shamed at the very least, better yet Merrill should be forced to give back every nickle in bailout money. Does it occur to anyone besides me that nobody in government is watching out for us?
After setting up this $770b bailout fiasco the White House is just marking time, waiting to leave this mess behind with next administration.
Troubled Asset Relief Program (TARP) is a strange bill that is divided into 3 parts. The first part includes the direct payouts to financial institutions, but the second part, Division B, is oddly the “Energy Improvement and Extension Act of 2008”? Division B of the bill would provide a number of tax incentives related to energy and fuel production and energy conservation which has absolutely nothing to do with saving banks from those toxic loans. The non-banking part will increase deficits by about $7 billion. Division C – The Tax Extensions and Alternative Minimum Tax Relief makes a little more sense, but add up all the sweeteners (pork) necessary to get this bill passed and you have got wacky things like a requirement that health insurance companies provide more coverage for mental health services, a tax benefit for victims of the 1989 Exxon Valdez oil spill and a tax exemption for makers of children’s wooden arrows.
Mr. and Mrs. Taxpayer, you were had… and we’re going to be getting more of the same as this so-called bailout for the Wall Street Rich moves forward. Maybe the next administration will have the guts to start handing out indictments for fraud instead of billions for the rich, but I doubt it. Our government and Wall Street are filled with too Bernie Madhoff’s.