Beet
Atlas Star
Posts: 29,060
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« on: April 05, 2009, 08:05:40 PM » |
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If Obama accepts the money back now, he runs the risk that the banks will get into trouble again in the future, and the need to give the money that the banks gave back to him back to them would be particularly damaging for confidence.
Furthermore, there's a reason the Feds forced even banks who didn't want the money to take it-- if they only gave it to the banks that really needed it, then any bank on the government's 'give' list would disproportionately lose the confidence of the market, thus cancelling out the effect of government aid to begin with. This happened with the Reconstruction Finance Corporation in the second half of 1932. The government must treat all of these banks equally and all of them as if they needed money. Obviously, the CEOs of the banks of different incentives as they want to differentiate their own concerns.
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