Banks to Continue Paying Dividends; Bailout Money Is for Lending, Critics Say

[Newsjock]

Source: Washington Post

U.S. banks getting more than $163 billion from the Treasury Department for new lending are on pace to pay more than half of that sum to their shareholders, with government permission, over the next three years.

The government said it was giving banks more money so they could make more loans. Dollars paid to shareholders don't serve that purpose, but Treasury officials say that suspending quarterly dividend payments would have deterred banks from participating in the voluntary program.

Critics, including economists and members of Congress, question why banks should get government money if they already have enough money to pay dividends -- or conversely, why banks that need government money are still spending so much on dividends.

"The whole purpose of the program is to increase lending and inject capital into Main Street. If the money is used for dividends, it defeats the purpose of the program," said Sen. Charles E. Schumer (D-N.Y.), who has called for the government to require a suspension of dividend payments.

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2008/10/29/AR2008102904533.html?hpid=topnews

[durablend]

1. Phew--thank god for that bailout!

I mean the country would've crashed into the ground if it hadn't passed! :sarcasm:

(oh...I guess they meant the CEOs wouldn't be able to afford that new corporate jet this month without it...) :sarcasm:

[KoKo]

8. And....the credit markets are still fozen up...that's why Fed cut the funds rate

yesterday. Once again Congress fell for the great Scare...mushroom clouds over America and gave Bush and his cronies the money. :nuke:

[msongs]

2. the bailout - a massive fraud and screwing of American taxpayers. nt

[ixion]

3. okay all you bailout supporters... behold the fruits of your labor

someone try again and convince me that this was anything other than a daylight robbery.

[durablend]

4. But...but..but...but...but...

(yeah, I'm not holding my breath)

[Waiting For Everyman]

5. What exactly are these banks good for?

They borrow money from the taxpayers, to lend back to us at a ridiculous rate, and then won't even do that.

The government will have to do it directly, because these banks aren't going to do it unless they're forced to. Even when they do, they're just a big middleman expense for nothing. Not to mention spinning their "derivatives schemes" etc.

Let them go bankrupt, and let the Treasury be the lender of last resort. This is bullshit.

[On the Road]

6. I Can't Believe That If They're on the Brink of Bankruptcy

they're not eliminating their dividends. Dividends are for companies with stable profits. This is pissing me off.

[happygoluckytoyou]

7. maybe that is what REGULATIONS are for..... REMEMBER THIS THE NEXT TIME SOMEONE SAYS "DEREGULATE"...

rules are good.... ONLY the "trust me" Republicans say you should "TAKE THEIR WORD THAT ANY INDUSTRY WILL SELF-REGULATE"

why trust THEM to SELF-REGULATE.... we know they DON'T.....

[Union Thug]

9. Well, those who sit on their fat asses and live off of dividends need their share

of the socialism-in-reverse pie. But, by gawd, we can't have national healthcare or free higher education for americans.

Eat the rich.