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Goldman did receive TARP funds, and used those funds to correct losses from maneuvers like this one. Regardless of whether or not Goldman Sachs considers that
by pak 17y ago
Goldman did receive TARP funds, and used those funds to correct losses from maneuvers like this one. Regardless of whether or not Goldman Sachs considers that it paid back all of its TARP loans with interest, having the government prop up the company with a bottomless loan made of taxpayer money for any period of time is a public loss. It practically sponsors bad behavior on the part of Goldman and other large financial firms, because there is now a precedent for the government saving them from bearing the consequences of massively horrific choices as long as they would also cause horrific potential damage to the entire economy. The moral hazard incurred by these sort of transactions in light of the government's response is a significant and unresolved risk.
- billybob 17y agoYes. This renews my fury about the bank bailouts. You know what's REALLY too big to fail? Capitalism. And rewarding market failure is the surest way to take it down.
- brezina 17y agoExactly! We should file suit against the US Treasury for propping up Goldman and others with our tax money. They defrauded us by forcing us bankroll the bailout while providing limited upside for the massive risk we took.
- dmillar 17y agoYou should read some of the actual accounts of how/why GS took the tarp funds. Paulson basically told them to take it, or the government would suck up all of their oxygen.
- wdewind 17y agoPlease share them, I'd love to.
- ZachPruckowski 17y agoGoldman received aid from the taxpayer through the AIG bailout. AIG was responsible for the insurance and CDSes that covered any bad assets at Goldman. Had AIG gone under, Goldman would not have gotten paid for those CDSes that were on derivatives of bad mortgages, and would have had a few billion in losses in 2008-2009. Maybe not lethal damage, but it's on the back of the taxpayer that Goldman has been profitable these last 2 years.
- ericd 17y agoGotta second this. I know more than a couple people at Goldman, and they weren't happy about being made to take the funds, and were especially unhappy that they've been vilified for it, when they didn't want it. It's kind of annoying reading all the uninformed mob anger directed at them. The media has made them into a scapegoat out of them in particular, and for some reason, everyone is following along.