The TARP money, which in case anyone has forgotten is a taxpayer subsidy to the largest banks, was supposed to help recapitalize the banks so that they would lend money.
For people with even a tiny knowledge of accounting, like me, this was never a credible idea. Money, after all, is fungible. In other words, if you give Citi $30B and they lend $30B there is no way to know how much they would have lent without a the subsidy. The Treasury Secretary knows this, but many members of Congress and other lay people do not which is why, on the one hand, they ask the banks to produce nonsensical reports about "how the money is spent", while on the other complain about the fact that they spend money to compensate their employees.
The problem with subsidies in general is that they are treated as "other people's money." People who spend OPM, as we know, are not subject to the same constraints as the rest of us, namely, fear and scarcity.
That is why, as we about to commit another huge amount to save these "essential" institutions in their present form, I think it is interesting to see how much they care about out money.
According to an article in today's NY Post (link below), two of the largest banks we are trying very hard to save from THEIR past risk-seeking behavior have found new interesting ideas for your money which have nothing to do with lending. Why? who knows. Perhaps is an attempt to game the up-coming auctions that are supposed to provide "transparency" to the market.
Perhaps someone should ask Mr. Geithner how come HIS banks have no trouble finding the correct prices when they want to buy these securities with OUR money. In addition, it would be nice to know whether the prices BofA and Citi use when they buy are consistent with those they show on their balance sheets.
Meanwhile, I am scared of the reaction of my fellow taxpayers when they find out as they inevitably will.