Banks want out of TARP

The front-page story of today’s Washington Post is glaringly obvious:

Six months after Washington rescued Wall Street, exasperated banks insist they want to leave the lifeboat.

Jamie Dimon, the chief executive of J.P. Morgan Chase, said yesterday that he regrets accepting $25 billion in federal aid. He called the money “a scarlet letter,” pledged quick repayment and renounced further borrowing from the government, saying, “We’ve learned our lesson about that.”

But the company, which announced a $2.1 billion first-quarter profit yesterday, has not entirely had it with Washington. J.P. Morgan said it plans to continue using a separate federal aid program through which it has borrowed more than $40 billion.

Other large banks are attempting the same combination of breakup and embrace. Even as they clamor to exit the most prominent part of the bailout program by repaying government investments, firms continue to rely on other federal programs to raise even larger amounts of money. . .

The chief executives of several large banks at a meeting last month urged President Obama to accept repayments. But no company has similarly pledged to leave the government’s other aid programs.

The explanation appears to be simple: Only the capital investments by the Treasury require the companies to make significant sacrifices, such as restricting executive pay.

(Emphasis mine.)

Of course!  Despite their proclamations of virtue, big businesses are happy to take money from the government, when there are no strings attached.  But when the government starts mucking with their business, they want out.  This is a front page story?

ASIDE: It is worth noting, however, that there’s a big discrepancy in size between the two programs.  According to the article, the $40 billion in loan guarantees have a value of $400 million to JP Morgan (and cost the government nothing if they stay afloat).  That’s a tiny fraction of the Treasury’s $25 billion equity investment.  The story doesn’t say what the value is of taking emergency loans from the Fed rather than the market, but with interest rates so low, I bet it’s fairly small too.

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