Via the Right Scoop, John Stossel gives us an inside look into the actual application of TARP with banks who didn’t need it and didn’t want it. John Allison, CEO of BB&T, not only didn’t want TARP money but openly opposed the program altogether, lobbying Congress against it. After all, BB&T had made wiser decisions and by normal standards was overcapitalized even after the financial collapse. Allison tells how Ben Bernanke became Time’s Person of the Year by pressuring healthy banks to take TARP money in order to hide which banks were actually in trouble:
How far off is this from, “Hey, nice bank ya got here. Hate to have anything … happen to it. Capisce?” As Allison explains, the Fed didn’t exactly sweeten the deal, either. BB&T had to pay back some hefty interest when they gave the money back — a tax on wisdom and good investment while providing political cover to institutions whose lack of same caused the fragility Bernanke wanted to mask.
But hey, protection rackets are like that. They tax the honest people to subsidize the less honest.
