A Sonoma resident, Dan de la Torre, wrote this article about just one of the myriad bank bailouts. Were they worth the $100s of Billions? Did TARP Work? Did the Obama Stimulus work? We have had enough time to tell. First his article.
Good money after bad
Sonoma Valley Bank was taken over by Westamerica Bank. I often pass by the branch on my way back and forth to work and I couldn’t help but notice a number of corporate suits swarming around the bank with very burly men acting as security guards outside the houses behind the bank which apparently housed their records. I thought to myself, “That’s odd, this looks more like a crime scene than a bank that has been taken over.”
After doing a bit of research, that seems to be the case. The reason why is this: Sonoma Valley Bank was one of many banks and lending institutions that received bail out money from the Federal Government also known as TARP, for Troubled Asset Relief Program, passed in 2008 by President George W. Bush. At the time this was, and still is, a very unpopular law that accelerated the entire “ Bailout Mentality “ in Washington.
It started with AIG then led to the auto bailouts of GM and Chrysler. State bailouts followed suit and then came the ongoing bailout of giant lenders Fanny Mae and Freddie Mac, which to this day are still hemorrhaging money. Proponents of the bill argued that immediate action must be taken, and for that reason the bill was rushed through Congress and signed into law despite polls saying that Americans were heavily opposed to the idea. These same proponents, in an attempt to build support, used the most inane excuse that “ These Companies Are Too Big To Fail.”
By passing TARP, the Federal government did several things at once, none of them good. First, it circumvented bankruptcy laws that were already in place to deal with these types of situations. Second, it put the Federal government in a conflict of interest situation by helping out some companies and not others, most notably Lehman Brothers and automaker Ford. And third, it addressed the symptom and not the cause by throwing money at the situation without addressing the root cause of how and why these companies found themselves in this dilemma in the first place.
Let’s use GM and Chrysler as examples. Both are private companies that make private decisions on product, agreements, labor rates, sticker prices, etc. All these decisions were made within the company. If the company made good decisions, then the company profited and prospered. If they made bad decisions, then the company’s financial health suffered. You and I, the tax payer, had no input regarding these decisions but by bailing them out, the Federal government has involved us in the ramifications of these bad decisions. That is not only illegal, it is flat out wrong.
If I truly wanted to help out GM or Chrysler, I would have bought one of their vehicles. If I wanted to help Sonoma Valley Bank, I would have opened an account there. The Federal government has absolutely no business using our tax money in this way. A free market economy means exactly that – free. It does not need the Federal government coming to the rescue every time there is a problem and compiling those problems with heavier regulations and restrictions. Each time it does it encroaches into the private sector and strangles the very businesses it seeks to save.
This is one of the many reasons why our economy is failing and we are seeing an example right here in our own back yard with Sonoma Valley Bank.
Dan de la Torre
Fast Forward to 2014, how has it worked out?
That is easy to answer, look at these two charts.
By Obama’s Own Projections His $800 Billion Stimulus made things about twice as bad as doing nothing and three times worse than he said it would. We paid $800 Billion to lose millions of jobs according to Obama’s own numbers.
That translated into a lot of human suffering. As Obama’s own administration numbers show today twice as many people as at any time before, can not find a job after 27 weeks. This only AFTER Obama and Bush’s massive bailouts.