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Banks With Political Ties Got Bailouts, Study Shows

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The Prof

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Lobbyists, lobbyists everywhere

Banks with political ties got bailouts, study shows | Reuters

U.S. banks that spent more money on lobbying were more likely to get government bailout money, according to a study released on Monday.

Banks whose executives served on Federal Reserve boards were more likely to receive government bailout funds from the Troubled Asset Relief Program, according to the study from Ran Duchin and Denis Sosyura, professors at the University of Michigan's Ross School of Business.

Banks with headquarters in the district of a U.S. House of Representatives member who serves on a committee or subcommittee relating to TARP also received more funds.

Political influence was most helpful for poorly performing banks, the study found.

"Political connections play an important role in a firm's access to capital," Sosyura, a University of Michigan assistant professor of finance, said in a statement.

Banks with an executive who sat on the board of a Federal Reserve Bank were 31 percent more likely to get bailouts through TARP's Capital Purchase Program, the study showed. Banks with ties to a finance committee member were 26 percent more likely to get capital purchase program funds.

Scott Talbott, a senior vice president with industry lobbying group The Financial Services Roundtable, said the study was skewed because it did not exclude nine of the largest banks that were "strongly asked" by the government to take bailouts.

Those banks included Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N), and Morgan Stanley (MS.N) -- all of which repaid their bailouts in June.

Bank of America Co (BAC.N) and Citigroup Inc (C.N) more recently announced plans to pay back taxpayers.

Talbott also noted that $116 billion has been repaid with interest.

"This demonstrates the banks were excellent stewards of the taxpayer's money," Talbott said.

But a watchdog for the government's bailout, the special inspector general for TARP, said last month that the broader $700 billion bailout program "almost certainly" will result in an overall loss for taxpayers.

President Obama said in October that despite the bailout, there was still too little credit flowing to small businesses.
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The Prof
 
Some observations:

1. Gosh, just yesterday George Mason University reported that a study conducted by its Mercatus Center found, after looking at 157 billion of STIMULUS funds and doing a simple tally, that "there was no statistical correlation between the amount of money a district got and its income or unemployment rate."

2. Indeed, not only was STIMULUS cash "awarded without regard to how badly an area was suffering from job losses," it was allocated such that "Democratic districts received 1.89 times more money than GOP districts."

3. It appears Ms Pelosi and her apparatchiks in lower parliament had more on their mendacious minds than mere economics when they put together those prodigious pounds of pork.

4. George Mason found that "far more stimulus money went to higher-income areas than lower-income areas."

5. Lobbyists, lobbyists everywhere.

6. Never has a White House been so OWNED by billionaire bagboys.

7. TRILLIONS literally in bonuses and bailouts to bloated bunglers, bankrupts and bums.

8. With nary a penny of accountability.

9. Where's the LENDING?

10. First the bankers and Wall Street.

11. Then the autos and UAW.

12. Now, insurance companies and phrma.

13. It's obscene.

14. Lobbyists have totally leveraged this leadership.

15. No wonder the CBC and Congressman DeFazio begrudge Tim Geithner, AIG and the Fed so much umbrage.

16. Geithner not only grandfathered those grotesque AIG BONUSES.

17. The Tax-Cheat-In-Charge-At-IRS also guaranteed all AIG obligations in full.

18. Backed as always by the tapped out taxpayer.

19. You bailed out all the bigwigs with bundles, with billions, Barack Obama, folks on the left and right fulminate in conformity.

20. But you've done NOTHING for the little guy.

21. You didn't even BEGIN to address JOBS until your dumb summit in December.

22. You've PRIVATIZED the gains of the megacorps, President Oblivious, but you've SOCIALIZED their losses.

23. Your own Inspector General for TARP labels it a LEMON.

24. Banks with political ties get bailouts, stimulus money goes mostly to wealthy democrat districts, health care turns out to be a multi trillion dollar giveaway to big insurance and phrma...

25. Lobbyists, lobbyists everywhere.

The Prof
 
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1: Paragraphs
2: And sentences
3: are good.
 
so are honest and effective govt
 
I've looked into this, and wanna know which party has typically aways gotten the bulk of the political contributions from the banks??

Whichever one happens to be in power (or about to be in power) at the time?

The banks are no dummies. They make big contributions to whomever is the chairman (or about to be) of the finance and banking committees.

Nobody's clean. (especially the prof ;))
 
hazlnut said:
I've looked into this, and wanna know which party has typically aways gotten the bulk of the political contributions from the banks??

Whichever one happens to be in power (or about to be in power) at the time?

The banks are no dummies. They make big contributions to whomever is the chairman (or about to be) of the finance and banking committees.

Nobody's clean. (especially the prof ;))
Click to expand...

Working from memory(ie, no sources for this), the banking industry is pretty uniform in it's contributions.

This story to me is kinda silly. Banks that pressed for more help got more help. How corrupt...
 
Redress said:
Working from memory(ie, no sources for this), the banking industry is pretty uniform in it's contributions.

This story to me is kinda silly. Banks that pressed for more help got more help. How corrupt...
Click to expand...

That's basically it.
 
idk said:
In other breaking news:

Politicians tend to favor political allies.
Click to expand...

Oh, but we were promised all this hope-n-change. What happened to that?:shock:
 
lobbyists, lobbyists everywhere

that's what trillions of dollars of hopeful handouts attract

bankers and brokers, auto companies and unions

and now (the point)---health care

insurance companies and phrma bought off the sucker in chief

or perhaps you didn't hear of obama's secret deal with phrma

Internal Memo Confirms Big Giveaways In White House Deal With Big Pharma

byron dorgan sure did

but his amendment to free up importation fell on the floor

under heavy pressure from the heavily mortgaged white house

Byron Dorgan's Drug Importation Amendment Up For Vote

now dorgan trails in dakota by 22

RealClearPolitics - Latest Election Polls

trillions in giveaways gratis

to whom?

for what?

where's the LENDING, mr president?
 
hazlnut said:
I've looked into this, and wanna know which party has typically aways gotten the bulk of the political contributions from the banks??

Whichever one happens to be in power (or about to be in power) at the time?

The banks are no dummies. They make big contributions to whomever is the chairman (or about to be) of the finance and banking committees.

Nobody's clean. (especially the prof ;))
Click to expand...

And during the eight years of Bush's term, we never heard the end of complaints about how the evil fat cat republican bankers were destroying the country. Are you telling me that that was just hypocritical whining?
 
RightinNYC said:
And during the eight years of Bush's term, we never heard the end of complaints about how the evil fat cat republican bankers were destroying the country. Are you telling me that that was just hypocritical whining?
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and i was under the distinct impression that TARP was authorized under the dubya bin lyin regime
Let me google that for you
seems that his politically connected, dumb ass political appointee, paulson, handed out party favors to those his party favored:
... This paradox highlights the lawlessness of the Bush administration, which has ignored statutory restrictions on TARP and treated it as a slush fund for politically favored supplicants. Although he has strongly criticized President Bush for flouting the law and exceeding his constitutional powers, President-elect Obama has applauded the latest manifestation of that tendency.

GMAC, which lends money to car dealers and buyers and also has dabbled disastrously in mortgages, has been bleeding billions for more than a year. In November, when it asked the Federal Reserve Board for permission to become a bank, the decision was based largely on the understanding that only financial institutions could receive help from TARP.

That was the Treasury's position, and it's not hard to understand why. The Emergency Economic Stabilization Act, which created TARP, authorized Treasury Secretary Henry Paulson "to purchase, and to make and fund commitments to purchase, troubled assets from any financial institution," the aim being "to restore liquidity and stability to the financial system."

But by the time the Federal Reserve approved GMAC's application, Paulson had decided that G.M. and Chrysler, which make not loans but cars, nevertheless could receive $17.4 billion from TARP to tide them over until Congress approves more aid. His epiphany about the meaning of the TARP law came immediately after Congress declined to approve emergency short-term assistance for the carmakers. ...
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The TARP That Covers Everything - Reason Magazine
 
justabubba said:
and i was under the distinct impression that TARP was authorized under the dubya bin lyin regime
Let me google that for you
seems that his politically connected, dumb ass political appointee, paulson, handed out party favors to those his party favored:

The TARP That Covers Everything - Reason Magazine
Click to expand...

I don't think you understood my point.

I'm well aware that TARP (which was by all measures a resounding success) was authorized during the Bush Administration. That has nothing to do with my larger point, which was that it is hypocritical to accuse one party of being a pawn of the bankers when in reality the bankers (like most industries) dole out their wealth to whoever is in office without regard for party.
 
apdst said:
Oh, but we were promised all this hope-n-change. What happened to that?:shock:
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Oh, I guess we need to blame Obama for the stimulus package that BUSH wrote.

TARP is Bush's program, not Obama's.
 
w-stands-for-what's-his-name wrote the stimulus?

LOL!

did he do the secret deal with phrma, too?
 
ScottD said:
Oh, I guess we need to blame Obama for the stimulus package that BUSH wrote.

TARP is Bush's program, not Obama's.
Click to expand...

And TARP worked. What's your point?
 
idk said:
In other breaking news:

Politicians tend to favor political allies.
Click to expand...

True, but in this case, it's just another day of politicians whoring themselves out, whether or not it is for an ally.
 
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