Ten of the nation's largest banks are starting to repay a total of $68B they received from the Troubled Asset Relief Program (TARP) fund. Without getting into the vagaries or a debate over the appropriateness of the bail-out, it appears that good old capitalism may be responsible for the pay-back: Management wants to be able to go back to their old ways, sitting at the top of the fiscal pyramid and collecting their large bonuses.
Nevertheless, as Treasury Department handed out the taxpayer's investments, it received warrants from the banks giving it the right to purchase stock at a fixed price down the road. One hopes that Treasury knew what it was doing and will get some return on that investment.
But seriously, the odds of the banks negotiating a fair market return for taxpayers is in the ball-park of Ares 1X getting down-range.
Along those lines, the Treasury Secretary is now starting to make deals with the banks in the rescue program. First up, Old National Bancorp which gave the Treasury Department $1.2M for warrants that may have been worth $5.81M. If this trend holds with the ten repaying banks, and those that will follow later, the banks could pocket 80% of the profits we taxpayers should have received.
Now contrast that with the generally accepted return of $7 for each $1 spent in the space program. Sounds like good old capitalism to us.
Now tell us again why the administration can't come up with a measly $3B?