USA Today is often referred to as the McPaper, but it’s done a public service with an investigation into how banks that received TARP funds acted afterwards. George W. Bush bailed out the banks to the tune of $247 billion in one of his last acts before leaving office. Only $181 billion (including interest) has been repaid, yet it’s not as if the money is being spent as intended.
Banks that received federal assistance during the financial crisis reduced lending more aggressively and gave bigger pay raises to employees than institutions that didn’t get aid, a USA TODAY/American University review found.
The reduction of credit during the worst of the recession raises questions about whether the $247 billion assistance program achieved one of its primary goals: to stimulate the economy by reviving the flow of credit to businesses and individuals.
Those running the banks didn’t just use taxpayers’ money to give themselves and their employees a bit of a boost. As USA Today reports:
Average pay at banks getting aid rose 9.4% in the program’s first year. By contrast, non-TARP banks increased salaries 1.8%.
That’s during the period we saw rampant unemployment and falling wages for most Americans—the Bureau of Economic Analysis announced today that per capita personal income went down 1.7 percent last year. President Obama might have rocketed up the deficit and passed his own bank bailout. But President Bush took us further along the road to ruin first.