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UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of ten of America's presidencies and who has edited alternative journals since 1964. The Review, which has been on the web since 1995, is now published from Freeport, Maine. We get over 5 million article visits a year. See prorev.com for full contents of our site

January 31, 2010

REPORT: $700 BILLION BAILOUT HASN'T HELPED LENDING, FORECLOSURES, JOBS

The Hill - The $700 billion bailout program for the financial industry has so far done little to boost bank lending, aid small businesses or reduce home foreclosures, a top government watchdog said in a report.

Neil Barofsky, the special inspector general over the Troubled Asset Relief Program, said in a report that while the bailout has helped stabilize the financial system, many of the program's original goals have not been met.

"Lending continues to decrease, month after month, and the TARP program designed specifically to address small-business lending - announced in March 2009 - has still not been implemented by Treasury," Barofsky wrote in the report. "The TARP foreclosure prevention program has only permanently modified a small fraction of eligible mortgages, and unemployment is the highest it has been in a generation.". . .

Barofsky questioned if the government has started to lose its leverage over the nation's largest banks now that they have repaid more than a combined $100 billion. The banks have seen their financial health improve significantly and they have continued to pay lavish bonuses to employees. . .
Without major changes, Barofsky said it's unclear if the TARP program could ever be deemed a success.

"It is hard to see how any of the fundamental problems in the system have been addressed to date," Barofsky wrote.

The report argues that the financial industry believes now more than ever that the government will bail out systemically important firms. And the government efforts to support the housing market risk reinflating a market bubble.

"Stated another way, even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car," the report says.

Barofsky's office has repeatedly called for changes to one program under TARP that created public-private partnerships to purchase toxic loans and securities. In his report, Barofsky noted the possibility of "suspect trades" in the partnerships that already exist. . .


2 Comments:

Anonymous Anonymous said...

"The banks have seen their financial health improve significantly and they have continued to pay lavish bonuses to employees. . ."

The employees getting the big bonuses are top executives. The people who actually do the work have had their raise scale capped at lower rates, and have had their bonuses deeply cut or all together ended. For the real worker in banks this has been a way for the banks to pay them less.

January 31, 2010 12:04 PM  
Anonymous Anonymous said...

Keep posting stuff like this i really like it

February 1, 2010 9:01 AM  

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