Bank of America Spends $7 Billion on Chinese Bank, Then Lays Off 30,000 Workers

[Are_grits_groceries]

Ah, the sweet smell of your TARP money being used to batter the US economy senseless. First Bank of America gets $15 billion of TARP funds, and issues $9 billion worth of bonds guaranteed by the FDIC, then it spends $7 billion to buy a big stake in a Chinese bank.

Now Bank of America announces it's laying off 30,000 to 35,000 workers. Why? In part because it took over Merrill Lynch and wants to "eliminate redundancies". Now, that's entirely rational for Bank of America, as is spending $7 billion to buy up shares in a bank cheap (they got a below market price). But it's not good for the US because that money was meant to be loaned to Americans and because layoffs make the economic situation worse (and those laid of workers will immediately cost the government a ton of money.)

Economic decisions which can be rational for individual companies or people can be very bad if everyone starts doing them. A large part of the government's job at this time is to make sure that as few people are getting laid off as possible, that money loaned to banks is being loaned to businesses and consumers and so on.

To put it simply, such money should be contingent on not laying off workers. It should be contingent on actually using the money to lend. If you aren't using the money to lend; if you are laying off workers, then you shouldn't get the money. This is especially the case with purchases—if a company is in good enough shape to be doing acquisitions, it's in good enough shape that it shouldn't need Federal help.
( a long article)

http://firedoglake.com/2008/12/13/bank-of-america-spends-7-billion-on-chinese-bank-then-lays-off-30000-workers/

Why didn't they just throw the money up in the air??
Then those assholes in Congress make anybody connected to the auto workers jump through hoops for about
2% of the money they put into TARP.
They better not give Paulson one dime of the TARP money that is left.

New word: TARP -1.to fool(v)
We were tarped into giving financial institutions money.
2. a fool
GWB is the biggest tarp known to man.