Rather than prevent foreclosures by acquiring troubled mortgage assets as EESA authorized, Secretary Paulson announced on Wednesday that TARP would not buy mortgage assets. Instead, Treasury would exclusively continue along the path of providing preferred equity injections to hand-picked companies. Thus, the only significant use by Treasury of the funds Congress authorized to address the mortgage crisis underlying the financial crisis includes, among other things, propping up a Beverly Hills banker to the stars; subsidizing the evisceration of National City Bank and the laying-off of thousands of Clevelanders who worked there; and indirectly funding the payment of bonuses, compensation, and dividends by financial firms that could not have afforded to make them without the TARP capital infusion. I think it’s fairly obvious that Congress would have never passed the EESA had it known how Treasury would marshal the resources it was given.
Dennis Kucinich, November 14, 2008