I know, I know, there is already more than enough out there to prove the point Wall Street can't be trusted. Well, here's some more. It seems the billions in bailout money that went to the big banks were not used for what they were intended for. (Gasp!) No really, now there is serious proof. The banks were supposed to start lending more money out to make the economy going. Many CEOs claimed they were doing that in order to fend off any lawmaker who asked them about it. Unfortunately though for the rest of us, they were lying.
From The Huffington Post:
Basically the bailout as it played out was wholly ineffective. The banks did not follow instructions from the government and instead went with the attitude of the market and squeezed their lending practices even further. Thanks to almost no oversight from the Congress for the TARP money, there was nothing anyone could do once those billions were doled out.
According to a Wall Street Journal analysis of Treasury Department data, the biggest recipients of taxpayer aid made or refinanced 23% less in new loans in February, the latest available data, than in October, the month the Treasury kicked off the Troubled Asset Relief Program.
The total dollar amount of new loans declined in three of the four months the government has reported this data. All but three of the 19 largest TARP recipients with comparable data originated fewer loans in February than they did at the time they received federal infusions.
The Journal's analysis paints a starker picture of the lending environment than the monthly snapshots released by the government and is a reminder of the severity of the credit contraction. One reason for the disparity: The Treasury crunches the data in a way that some experts say understates the lending decline.
Now we were told when TARP was being drawn up that everything was going to go by the book and that the banks would do as they were told. The cynics though, we right and there was no reason to doubt them. Unless you have stringent oversight when dealing with Wall Street, the odds are everyone but them is going to get screwed in some fashion. Many of these people should be in jail but then where would they spend those fat bonuses for a job