If you don't believe that the bank bailout is a train robbery you probably never will, but if there's sill hope for you to wake up you will want to know why there is absolutely no oversight as to how the money is distributed or spent. Where as the British and Europeans at least put on a display of governance in the United States they dropped all pretense of oversight.
But compared to the British intervention, the U.S. model is quite hands off.
The U.K. essentially took control of those banks with a $63 billion investment, acquiring voting shares (as opposed to preferred shares, which are non-voting). The CEOs of the banks stepped down, and the government could even take board seats at the banks. As the New York Times puts it, the move “creates a two-tier banking system in which the nationalized banks are run like utilities and others are free to pursue profit growth.”
By contrast, the U.S. plan has few strings attached so far. Nine of the country’s biggest banks have signed on so far (the tally: $25 billion for Citigroup, JP Morgan Chase and Bank of America; $10 billion for Goldman Sachs and Morgan Stanley; between $2 billion and $3 billion for Bank of New York Mellon and State Street).
Well it just naturally begs the question whether or not the banks will blow the bailout money.
The warnings from experts and economists that the banks will hoard instead of lending are plenty. John Kanas, the former CEO of North Fork Bankcorp, tells the Wall Street Journal that the banks are likely to use the government capital to retire outstanding debt that pays a higher yield than the 5% on the government's preferred shares. Some worry that the banks will simply use the money to pay stockholders, since the plan (unlike the U.K.’s) doesn’t prevent the banks from paying dividends.
Whether or not they blown the bailout money as a matter of perspective. If you believe the banks really awant to lend the money then you have to conclude the banks of blown it, but it was a train drobber and all along, then it's been handled splendidly. What we can say for sure is that they have not made it available for lending, they have not made it available for oversight. So, let's ask again; what was the bailout, and economic rescue or train robbery?
If you need a little help before answering, then watch this from the Associated Press.
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