Maryland Congressman Elijah E. Cummings (pictured above) has been one of the lawmakers on the forefront in expressing dismay that institutions that received taxpayer dollars and guarantees might have used the money to DO WHAT THESE COMPANIES HAD COMMITTED TO DO BEFORE TARP FUNDS WERE AUTHORIZED.
Some of these companies, such as AIG, faced receivership absent taxpayer cash injections, which would have annulled some or all of the contracts it held with employees and the holders of insurance contracts. However, as long as they have the money, they are legally obligated to pay up, which is exactly why TARP was a bad idea in the first place and hasn't served to improve credit spreads in any event. AIG was doomed to fail because of bad management that made bad bets on risky instruments. Injecting fresh money into AIG without first declaring the institution insolvent and forcing wholesale restructuring is complete idiocy, but that is exactly what we did and is exactly what we are now griping about.
Which makes me wonder how bright legislators, such as Representative Cummings (who voted in favor of TARP twice), really are, and how safe our national patrimony is in their hands.
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