More Sweetheart Deals

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Back in October, when we started bailing out banks with TARP funds, the Treasury received warrants from each bank in return for their investment.  Several of these banks have now paid back the TARP money, but what about the warrants?  While I was on vacation the Treasury announced its plan for selling the warrants back:

The Treasury Department said the banks will make the first offer for the warrants. Treasury will then decide to sell at that price or make a counteroffer. If the government and a bank cannot agree on a fair price for the warrants, the two sides will have the right to use private appraisers.

This is ridiculous.  This isn’t like the toxic waste on bank balance sheets that can’t be sold because it’s impossible to value.  If you want to know how much the warrants are worth, just offer them to the highest bidder.  Simon Johnson has it right: “The only sensible way to dispose of these options is for Treasury to set a floor price, and then hold an auction that permits anyone to buy any part — e.g., people could submit sealed bids and the highest price wins.”

If the Obama administration wants us to believe that it’s not entirely in thrall to the banking industry, it needs to stop offering absurd sweetheart deals like this to banks that already received sweetheart deals in the original TARP bailout — and are continuing to benefit from trillions of dollars in various Fed support programs and liquidity guarantees.  Just auction the damn warrants.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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