Archive for bailout

Will US Taxpayers get the same deal on “flexibility” as bailedout Banks?

Posted in Czar with tags , , , , on April 13, 2011 by saynsumthn

this just in from Reuters:

U.S. Pay Czar Allows AIG Flexibility with Pay Packages at AIG
The U.S. pay czar will allow bailed-out firms American International Group, Ally Financial and General Motors to be flexible with their compensation packages for certain high-paid employees, according to letters released on Friday.

The Obama administration’s pay czar must give her stamp of approval on pay packages for the top 100 earners at the four remaining companies that have received exceptional government assistance from the $700 billion Troubled Asset Relief Program.

Patricia Geoghegan, TARP’s special master for executive compensation, already reviewed the pay packages for the top 25 executives at the bailed-out firms. According to Friday’s letters, the compensation structure for the next 75 highly paid employees was approved with minor modifications.

A significant portion of compensation must be based on performance in order to win Geoghegan’s blessing.

Under the law, pay packages are subject to restrictions and must be approved by Geoghegan to ensure that taxpayers are not excessively rewarding executives at companies that received the most government help.

Another news agency reports that Acting Assistant Treasury Secretary Timothy G. Massad said some banks who received BAILOUT funds from the Federal Government, will repay their loans with money from another federal program, the Small Business Lending Fund, which was created to encourage smaller banks to make loans to small businesses. – Will taxpayers be able to get these loans to save theior homes and pay their taxes?

But the Washington Post reports that Linus Wilson, an assistant professor of finance at the University of Louisiana at Lafayette who has analyzed TARP data noted that 164 small banks and credit unions that had received TARP funds — nearly a quarter of those that got aid — missed their most recent TARP repayments. He also said that despite TARP’s positive results, it had posted far lower returns than private investors who made similar investments.

One of TARP’s harsher critics remains Neil Barofsky, the outgoing special inspector general for the program. He has disparaged the handling of the lack of transparency and the handling of TARP, particularly the Home Affordable Modification Program, or HAMP.

“It fulfilled its promises to Wall Street, as reflected in the return to record profitability of the nation’s largest banks,” Barofsky said in his testimony on Capitol Hill this week. “But unfortunately, it’s failed to live up to some of its promise to Main Street.”

Barofsky often has warned that TARP could leave a legacy of “moral hazard,” meaning that financial firms might take more risk in the future if they think the government will step in during a crisis.

So…the banks get a BAILOUT and lag time to repay the loans- will you get one when you do your taxes on April 15th…Just say’n?