I realize that it has been a hectic few months. I understand that it is crisis after crisis over there at the Treasury. Normally I wouldn't bother you, but this Bloomberg News story was the last straw: "TARP Warrant Sale Shows Banks May Reap 'Ruthless' Bargain" It has become increasingly apparent to anyone watching the Treasury Department that the department doesn't realize for whom it works - the citizens of the United States of America, or to put it simply the People.
While you may serve at the pleasure of the President, you work for the People. This means you need to stop thinking your responsibilities begin and end with the financial community. No sir, while that community deserves consideration, it is minor in comparison to the consideration that needs to be given to the other approximately 98 percent of the citizens.
I realize that this is a huge mindset change for you and most of the people who currently work closely with you, but I'm going to try to make it easier for everyone there.
If you wouldn't consider it a good deal for your personal finances, or for a company you own a large stake in, it isn't a good deal for the People. Don't do it that way.
Unless a company is declaring bankruptcy, you don't accept pennies on the dollar from them. And that includes when "you" are the Treasury of the United States of America. We have bills to pay, too. And a lot of those bills are because of companies that are going to want to buy back their warrants for little or no money. See the previous point.
When the American people cannot find work, and thousands are being put of work daily, the economy is not recovering. Stop thinking that the only economic indicators that matter are those that have to do with the financial sector. For instance, a jobless recovery is NOT a recovery. Do not ever call it that again.
When you hold the largest stake in a company because management has been so inept, negligent and/or fraudulent that the company would have failed without government intervention, said management does not deserve to be rewarded. Stop enabling bonuses for upper management, in most cases they are overpaid for the job they are doing and have done. That is just wasting money the company could be saving up to repay the United States Government. Nor are retention bonuses needed. Just let them go, if they were so good, the government wouldn't have an ownership stake in their company. They can have their bonuses back when the company is actually private, if they still have a job.
When you say you give a company money so they can do something, make sure they have to do it or return the funds. You know that quite a few small and medium businesses might have been able to stay in business, and/or retain all their employees if the banks had actually used most of the TARP funds in the manner the public was told the funds were for. Credit is still tight out there, if the intent was to free up credit markets, make sure that is what government funds are used to do.
Do not tell the People you are spending their money for one thing, when you intend it for something else. Be honest. When other representatives of the People ask for an accounting of how you are spending their money, provide it happily and promptly. And make sure it is complete, transparent and accurate. No more financial shell games of paying one company for something that never happens as that money is really being funneled somewhere else. Maiden Lane, anyone?
These is just a start. In a few weeks when you have gotten used to saying "no", and "that isn't a good idea without major restructuring" to the financial sector we will move on to steps two and three of doing the People's bidding. I'll give you a preview, what went wrong and should anyone be prosecuted needs to be discovered. How do we make sure this never happens again? And get over the idea that markets shouldn't be regulated, the last ten years have proven that theory to be utterly without merit. Simple children games have rules so everyone knows what the game is and how it is played, financial markets and instruments need the same. And the Treasury has to make sure that the rules protect the innocent, level the playing field and define clearly the market types, and it has to police the players to make sure they are all playing by the same rules.
But first the department has to internalize the fact that they do not work for Wall Street anymore. The age of private gains and public losses has to end. We can't afford it any longer.
Sincerely,
The People