Andrew Cuomo, current attorney general and either future governor of New York State or US Senator, decided to force eight large banks that received TARP money to disclose their employee compensation for 2009. Some estimates put the banker pay-out that these firms made at over $60 billion. Each of the banks on the list has paid back all the TARP money they borrowed.
“Some banks made a lot of money because, in some cases, taxpayers gave them a lot of money,” Cuomo said at a news conference according to Reuters. Citing the nation’s 10 percent unemployment rate, he added: “The taxpayer is still paying that cost.”
Cuomo’s reasons that unemployment is somehow tied to the collapse of the bank and credit systems. This may be true, but to find a linear correlation between them is impossible. The banks the took TARP money have indeed paid it back and the government has made money on the warrants attached to the TARP capital. Those profits could certainly go toward unemployment programs.
The large banks that received TARP money have not only paid it back but several of them, particularly Goldman Sachs (NYSE:GS) say that they never needed the money at all. Goldman did get capital from Warren Buffett and probably did not need additional funds.
Public companies have boards to set pay packages. That is no different in the case of banks that received government aid and repaid it, although Cuomo seems to think it is. The boards may have to deal with unruly shareholders and sullen politicians, but that is why board members make so much money.
Douglas A. McIntyre
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