From CNBC, I gather that Goldman Sachs received $10 billion in TARP funds, and paid out $10 billion in bonuses.
Of course, the typical CNBC crew resorts to this news with shouts of ‘class warfare!,’ but I think there’s an interesting problem here.
I was under the impression that the TARP was to stabilize institutions whose failures were otherwise unavoidable and whose downfall would lead to massive jolts to the global economy.
Instead, it appears that Goldman Sachs faced a choice between going bust and perhaps losing those employees who could other jobs in this bad economy, and of course would face higher rates of employees quitting in the years ahead.
How “needed” are these TARP funds if the choice is not between bankruptcy and TARP, but between reduced marginal ability to retain staff and TARP?