One of the more salient points offered by those who would use the tax code to confiscate bonuses from AIG and anyone else who took “bailout” money is that the banks shouldn’t have taken taxpayer money in the first place. On balance, I agree that they shouldn’t have taken taxpayer money – although I can’t go so far as to say it justifies a punitive tax clawback.
However, John Hinderaker over at Powerline (h/t Mark Steyn @ NRO – The Corner) provides a critical reminder of something I noticed last October - more than a few banks took the “bailout” money at the point of a gun:
Wells Fargo didn’t want any TARP money, but the government forced it to take more than $5 billion worth . . .
I only now realized that I didn’t quite explain last October how a bank could be forced to take the money. The day Paulson shifted gears and decided to use the $700 billion to buy stock in banks rather than just the “toxic assets,” any bank in America – like Wells Fargo, for example – suddenly came under the scope of the government’s eminent domain power. If Uncle Sam wanted a piece of your bank, he could just take it and offer you “just compensation” – no matter if you steered clear of Wall Street’s bubble (which Wells Fargo largely did).
Thus did the heads of the nation’s leading banks find themselves huddled together in a room to receive a non-negotiable demand for their stock, and a whole bunch of other regulations, in exchange for money that at least a few of them never wanted in the first place.
Try to keep this in mind, dear reader, the next time your Congressman uses the power to tax in order to destroy the bonuses of several bailout “beneficiaries” (as, sadly, my member of Congress did).
My view of it is much simpler. If we didn’t bailout AIG in the first place there would be no taxpayer money going to bonuses.
And now another $1 trillion is going to buy the “toxic assets” (and in my view bail out banks). How much more of this do we have to take?!
No arguments here. This is really a prime example of government making a mistake in a desperate attempt to “fix” its last mistake.
[...] been fired. We now know that Paulson himself shifted gears on everybody and, in some cases, rammed bailout money down the throats of unwilling banks, and as such, that the Wall Street Panic overshadowed a banking system with more resilience than [...]
[...] as that bait and switch was, Paulsen then dragged healthy banks into it – literally forcing them to take TARP money in a de facto eminent domain move that would have made New London [...]
[...] as that bait and switch was, Paulsen then dragged healthy banks into it – literally forcing them to take TARP money in a de facto eminent domain move that would have made New London [...]