If your business goes south and I give you a loan of $10,000, for preferred shares in your company. Then, I cover a bet you made with another company for $13,000. You repay the first loan, but I forgive the interest from the preferred shares options, am I made whole in the deal? No, you still owe me the other $13,000. Then why is everyone forgetting about Goldman Sachs' $13 billion AIG reward? The government "made" Goldman take the TARP funds, $10 billion, just like Warren Buffett "made" Goldman Sachs take $4 billion of his hard earned money. Goldman was supposed to give the Treasury preferred shares, but reneged on that deal. They've now repaid the TARP money after we gave them an additional $13 billion through AIG. How has the Treasury and the taxpayer been made whole in this deal? The government is just enabling gamblers to make bigger and riskier bets at taxpayer expense. It's wrong and should be stopped. This is not capitalism in any fair sense of the word. This is enabling a pathological illness in the banking system at best and it's cronyism at the worst. Or we can call it fraud, theft, or some other term that is closer to reality, but the latest Goldman profits are not profits at all.
Labels: enabling an illness