Economics

TARP vs. Embezzlement: Steal a Little and They Throw You in Jail, Steal a Lot & They Make You King

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If you were a banker, which of the following activities would be more likely to land you a quick trip to the federal penitentiary? Is it:

(a) Misrepresenting your dying bank's financial condition in order to secure almost $300 million in TARP bailout cash and then quickly proceeding to lose it all, or

(b) Embezzling about $235,000 from your employer to support your compulsive-gambling addiction and pay off personal debts?

The correct answer, naturally, is "b." In this country, when it comes to matters of high-finance crime and punishment, little pigs get slaughtered, while hogs get fat—convicted Ponzi schemer Bernard Madoff being this rule's most notable exception.

The facts here aren't hypothetical. This actually happened at a San Francisco-based lender with assets of $10.9 billion called United Commercial Bank, which is in the spotlight again following a report last month by the Federal Deposit Insurance Corp.'s inspector general on the causes of its failure.

The mid-level bank officer who stole the money to support his gambling habit, Alex Yan, 50, was sentenced to 27 months in prison in June 2009 and ordered to pay restitution to UCB of $235,695. He pleaded guilty about two months after a grand jury indicted him in November 2008, which happened to be the same month UCB received its $298.7 million under the TARP Capital Purchase Program.

UCB's failure cost the FDIC $1.5 billion on top of the flushing of TARP funds. More here.

Hat tip: Libertarian Democrat Terry Michael.

Headline allusion: Bob Dylan, who knew a woman who wanted a whole bank, not just a half.

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  1. Now thats what I am talking about.

    Lou
    http://www.web-privacy.at.tc

    1. Fuck off, Jodi.

      I did a quick search on the former CEO Thomas S. Wu and former COO Ebrahim Shabudin (both resigned after it came to light the books were cooked)…

      Turned out, the former COO was teaching business ethics classes as recently as March.

  2. And the folks who generally complain about the rich looting the country are the same ones who support the madness of TARP. They never seem to see that the result of giving obscene amounts of free money (I know, it’s supposed to be paid back) is that it encourages waste on a scale far worse than any venal waste engaged in by “the rich.” So I know people who would complain about a Hummer but not blink an eye at the government flushing enough money to run an army of Hummers down the toilet…

    1. “And the folks who generally complain about the rich looting the country are the same ones who support the madness of TARP.”

      Really? Can you show your work here?

      1. Sorry, I wasn’t clear in what I wrote. I meant my lefty friends (who all the time complain about “the rich” and treat wealth as a moral failing) are the same ones that keep telling me that TARP is a good idea and had to happen. They complain about eeevil corporations and then support policies that enrich them. They don’t seem to see that TARP is the same kind of looting they claim to object to, only squared.

        1. Dear god don’t reinforce the “show your work” and “cite” meme.

          1. Is “meme” a meme?

    2. Why is it, when I look at your handle I see “cuntmuncher”?

      1. I don’t know. Maybe because you aren’t getting any yourself and are projecting your fantasies on me.

    3. ” run an army of Hummers down the toilet…”

      I want to see an army of Hummers down a toilet.

      1. The act of receiving a hummer while on the toilet is called a “Blumpkin”, yo.

    4. I understood the necessity of bailing out the banks, because if we hadn’t, the whole ship would have sank, taking us down as well.

      The problem is that we didn’t follow this up by stringing up the 50 bankers most responsible for the mess, and taking the next 500 most responsible, stripping them of every last asset they have, throwing them and their families out on the street with nothing but a burlap sack, and hiring a personal IRS-auditor-for-life to follow them around, who is there to take back for the taxpayer every nickel these bums earn by returning pop cans they find under the bridge.

      Punish bankers = problem solved.

      1. Ahh clearly. Things always get better with punishment.

      2. The problem is that we didn’t follow this up by stringing up the 50 bankers most responsible for the mess…

        If this is to be the case, the last 70 years of monetary policy morons at the Federal Reserve should make it a pretty long queue. After all, it’s much easier to make shady deals when your golf buddies are the people arbitrarily setting the interest rate and controlling money supply. You might very well add the generations of politicians that decided guaranteeing loans made by private institutions (as well as their profits) is proper use of taxpayer funds.

        Why stop with the bankers, Chad? They can’t engage in institutional-scale crookery without their political connections stacking the deck behind the scenes.

        …taking the next 500 most responsible, stripping them of every last asset they have, throwing them and their families out on the street with nothing but a burlap sack, and hiring a personal IRS-auditor-for-life to follow them around, who is there to take back for the taxpayer every nickel these bums earn by returning pop cans they find under the bridge.

        Sounds like a great retirement gig for Congress.

        1. You can be sure some of the 50 and 500 had moved from the banking industry into government (and perhaps back to the banking industry again).

          The whole industry is so rank with corruption and fraud that there is nothing such as an “innocent” person anywhere near its top.

      3. The problem is that we didn’t follow this up by stringing up the 50 bankers most responsible for the mess, and taking the next 500 most responsible, stripping them of every last asset they have,

        Ummm if your buddy Obama had not bailed em out they would have been punished by the market.

        The problem is your team did not let them fail.

        1. No, actually they wouldn’t have, Josh. Back in the old partnership days they would have. Nowadays they only took a minor hit to their wealth, and at worst just switch to a different job somewhere.

          1. No, actually they wouldn’t have, Josh.

            Tell that to AIG and Bear Stearns.

            Some would have survived and some would have died. That is how the Market works.

            at worst just switch to a different job somewhere.

            Why would a firm the did not invest heavily in mortgage backed securities and insulated itself hire some idiot from a failed firm that did the exact opposite?

            Also should everyone who was a member of a failed firm be barred from the job market? I worked for Kozmo.com. Not an important job. I made no real decisions. I did learn a lot though on how not to start and run an enterprise though. Should I be barred from employment?

            What sort of “justice” are you seeking here? From what i can see it has nothing to do with recovering from a recession. It resembles revenge rather then getting people jobs.

      4. Class warfare is awesome and so productive.

        You know who else liked class warfare?

        1. Republicans? Warfare goes both ways. The rich have been winning. You’re bitching that the attacked are engaging in warfare against the attackers… as if that’s just too uppity.

          1. The rich have been winning.

            Yup they sure have. Normally the market keeps them in check but your team blue decided to give hundreds of billions of tax payer dollars to them to insulate them from that market.

            1. your team blue decided

              This was a Bush administration initiated plan, passed by a bipartisan vote…how is that TEAM BLUE?

              Whether you agree with it or not, it seems that the majority on both teams supported it.

              1. For a brief moment in 2008 though it seemed like Team Red was going to grow a spine and stand up against TARP, but then it returned to its normal state of something less than sentience and passed it. Team Blue never even got that far, though.

          2. The rich are always the ones winning. Have you ever seen a class warfare argument where the poor were kicking ass? Jesus christ the working class being oppressed is the basis for the term.

            You’re assuming there is some sort of attack between classes, which is bullshit unless you want to label political society a class. Then you might have an argument. You’re retarded antiquated notion that just because someone has gained wealth they have done so to the detriment of another is patently fucking false.

  3. JERRY: Leo, I saw you steal.

    LEO: Oh, they don’t care. We all do it.

    JERRY: Who, criminals?

    LEO: Senior citizens. No big deal.

    JERRY: You could get arrested.

    LEO: Arrested? Come on! I’m an old man. I’m confused! I thought I paid for it. What’s my name? Will you take me home?

    JERRY: Leo…

    LEO: Alright, alright. Mr. Goody Two-Shoes. You made your point.

    JERRY: Thank you.

    LEO: Will somebody answer that damn phone?!

  4. They said we would never have a black president and that chicks can’t play guitar. We are indeed living in a brave new world.

    1. Although the quitarist in the video is a woman, the guitarist who played on the recording of this song is a man.

      1. ….and we have a President who is half-black.

        1. but he totally denies his white half, and keeps it real 24/7

  5. VERY CORRECT music from Mr. Gillespie

    RESON is once again the “Best of Ye Web To-day”

    False-hearted judges dying in the webs that they spin,
    Don’t follow leaders–decapitate parking meters

  6. Kill a man, you are a murderer.

    Kill a thousand, you are a warrior.

    Kill a million, you are a great political leader.

    Kill everyone, you are God.

  7. So, help me. The guy who stole a quarter million dollars should NOT go to prison?

    1. OR, the board members and top management should be charged too.

    2. No, he should be sharing a cell with the banker also mentioned.

  8. http://biggovernment.com/capit…..ver-trial/

    Huge horrible misconduct on the part of a Bush appointed judge and the Bush DOJ on an immigration matter. It doesn’t get any better than that for Reason. Except that it is being reported by the evil Andrew Breitbart, whom we have established is evil and can’t be trusted.

    Reason’s staff’s heads are exploding rigth now.

    1. “Reason’s staff’s heads are exploding rigth now.”

      Wnrog.

    2. “Except that it is being reported by the evil Andrew Breitbart, whom we have established is evil and can’t be trusted.”

      Hey, you jumped to his conclusion while the Reason staff wisely withheld judgment until they could better ascertain what the situation was. Don’t hate on them for your being guillible dude.

      1. And you have said on numerous occasions how evil Breitbart is. So I fully expect you to defend the cretins in this story from the slander.

        And of course we all know Breitbart is an agent of the Republican party. His site must have been hacked. Or maybe he is running this as some kind of double cross operation.

        You are so much fun to screw with. Your posts are so predictable, I should just start writing them for you to save you the trouble.

        1. John,
          If you think Breibart is anything other than a right wing hatchet man I pity you. This story may have have legs but that does not make Breitbart a credible journalist. He forfeifed the presumption of journalistic integity a while ago.

          1. He is a right wing hatchet man. I guess that is why he published this. This is an outragous story. And extremely embarassing to the right and especially anti-immigration people.

            This ought to be a big deal. The judge involved needs to be impeached. And it is going to be funny as hell watching people like you jump up in down in outrage over a story broken by someone you claim is such a hack.

            1. If he was not a Republican operative, John, you would not be so vociferously defending him, because you are nothing more than a hack too.

        2. John, you are just inventing things to get mad about, at both Reason and MNG. Just fucking shut up already.

          1. Fuck you AO. You are nothing but an ass kisser anyway. You have never taken a position on here or defended anything that didn’t fit what Libertarians want to hear.

            That would be okay if it just meant you were dogmatic. Instead it just means you have absolutely no balls.

            1. Invent away, tiny stuff. Just about everything you say is strawmen you set up just to knock over. You’re a one-man faux-outrage machine.

              1. All that without calling for John’s banning, TAO? Maybe it comes later.

            2. “You have never taken a position on here or defended anything that didn’t fit what Libertarians want to hear.”

              Er, maybe he actually IS a linbertarian John…

              1. Libertarian that is…

                I mean, that could explain why he says things libertarians would agree with, right John?

                I mean, I don’t even think it has to do with John’ hackitude as much as with his paranoid mind. John’s world is chock full of the nefarious “they” who are part of a closet leftist cabal keeping the “truth” from God-fearin’ Americans everywhere…

          2. In John’s defense if this story made the left look bad Weigel would have wrote “Judge hugs immigrants” or something.

            There are degrees to hack job. Breitbart is at least better then Reason’s own 2008 election correspondent.

        3. “And you have said on numerous occasions how evil Breitbart is.”

          I have? I’m not sure I had even heard of the guy before he blew the Sherrod story and you fell for it. When that story broke here I said there must be more to the story, and lo and behold, there was. You on the other hand fell for it hook line and sinker, and incredibly have continued to link to him since…You’re like an abused wife who keeps coming back to her man…

          The Reason staff was right to not take Breitbart seriously, you were wrong. It’s incredible that what you take from that experience is to chide the Reason staff for not buying into his stuff… But then again, he represents your team so I guess you feel obligated to love on him and all…

          1. I’m not sure I had even heard of the guy before he blew the Sherrod story and you fell for it.

            Really?

            That surprises me… Breitbart and Reason go back at least a few years.

            here is a video of him on reason.tv

            https://reason.com/archives/200…..ntv-saturd

            with Nick Gillespie and Matt Welch and red eye’s Gutfeld.

            I even think it was filmed at some reason function in their DC offices.

            1. wow watching that video Gutfeld and Breitbart both said they applied for jobs at Reason and were both rejected.

              That would have made this place different.

              1. They could never make it the same as when Virginia Postrel was here.

                1. They could never make it the same as when Virginia Postrel was here.

                  Never understood this. The only things i know about her is that she donated some organ to a stranger and she claimed the term “international banker” was code for “Jew”.

                  Anyone want to take a shot on why her name always carries that strange weight when it is mentioned?

                  Anyway I like Reason as it is now so I was not implying that Gutfeld and Breitbart would automatically make it better. Only different.

            2. Min 18:19 is prophetic

    3. John,

      I agree that the only reason that the Reason staff aren’t all over a story published at 2PM on a sunny Friday must be because of Breitbart hate.

      Can’t think of a single other reason.

      1. I am sure they will publish it. You miss the point. They will publish it and howl in outrage and rightfully so. But it will be over a story broken by someone they claim is unreliable. He will be found to be plenty reliable when he is telling them what they want to hear. That is the point.

        1. Like Fluffy said, if Hitler comes and tells a wifebeater, “Hey, you beat your wife, and that sucks”, Hitler is right, even though he is Hitler.

          Just for clarification, John, ’cause you’re a ‘tard, I am not calling Breitbart Hitler. But you can make it up and then knock that over too, if your fweewings need a widdle wift.

        2. You truly are an idiot. It’s as if, in your mind, you can’t separate giving someone credit for breaking a story — even if that person has been less than credible in the past — while investigating the merits of the story to determine its veracity.

    4. Reason’s staff’s heads are exploding rigth now.

      This seems like a generalization to me. Reason has a diverse group and they don’t seem incapable of disagreeing with one another.

      I say we rate em!

      Weigel: so deep up team blues ass his toes are indego.

      Welch: Hates team blue and team red and if given half a chance will grind either of them into dust.

      Nick: libertarian with an ever so slight lean to the right

      Tim: Wrong on the housing bubble. But I don’t think that comes from any team….You can be a libertarian and be wrong.

      Baily: For global warming he is a full blown communist. On other issues he is straight libertarian

      Peter: The missed opportunity Middle of the road libertarian.

      Anyway this is my list at the moment and aside from Weigel I am not married to my position. Also i did not mention everybody.

      Now it is your turn!

    5. In the interest of truthiness: The source is undisclosed. Former Rep. Bob Barr did an op-ed covering this on Big Government earlier in the week. Guess who is on Sholom Rubashkin’s legal team?

  9. To make the comparison complete, I think you’d have to subject compulsive gamblers to a stress test.

    You force all the gamblers to embezzle money from their employers, and then you go over the gamblers’ outstanding gambling debts and look at their income.

    If a gambler isn’t sufficiently solvent, then you make it against the law for that gambler to pay back the money he embezzled. …until some bureaucrat says it’s okay.

    And when he does pays the money back, you don’t let him pay it back to his employer; you use it to bail out the UAW’s pension fund.

    Now the analogy is complete.

    1. +1

  10. Infidels was Dylan’s best album, even if it was chock-full of protectionism and zionism.

    1. Best? Dude.

      I liked Infidels ALOT but it falls way behind

      Blood on the Tracks
      Time Out Of Mind
      Highway 61 Revisisted
      Blonde On Blonde

      At least!

      1. From a songwriting perspective, Blood on the Tracks might be better, but I think the instrumentation on Infidels tips the scale.

        And of course if you include the outtakes from those sessions, it’s hands-down:

        Blind Willie McTell
        When the Night Comes Falling from the Sky
        Foot of Pride
        Lord, Protect my Child
        …and a bunch of others that got re-worked and put onto Empire Burlesque and Down in the Groove.

        I know that isn’t playing fair, but still, but it does make a case for his having peaked in the 80s.

  11. http://online.wsj.com/article/…..on_LEADTop

    Kimberly Strassel interviews America’s biggest statist douchebag.

    1. I liked how he’s doing this job for nearly a decade and he claims he’s racked by doubt every night.

      I can understand someone doing a stressful job they hate for a few years, but a decade?

      Hang in there that long, and it means one likes it.

      1. Of course he likes it. He loves having that kind of power over people’s lives. Anyone with any morals would hate it and quit after a month.

  12. Something about John’s post here in this thread make me think this is an appropriate place for this…

    http://news.yahoo.com/s/livesc…..opinionbah

    “People often become more confident in their beliefs when they find out the majority of others disagree with them, a new study finds. “

    1. The study hasn’t been published yet, so let’s wait for the full result before drawing conclusions. The article to which you link only mentions the results for subjects holding negative opinions about the fictional company, and hints at the end that the opposite held for those with positive opinions about it, so Petty’s assertion that this happens because people want to feel smarter than everyone else doesn’t hold water.

    2. Ive often claimed that The Majority is Always Wrong.

      So, seems reasonable to me.

      Its hyperbole, of course, but not by much.

  13. People often become more confident in their beliefs when they find out the majority of others disagree with them, a new study finds.

    The unexamined assumption there that fucks up their interpretation of the findings is the idea that people believe their own opinions.

    They don’t.

    1. I don’t think you mean that.

      ;^)

  14. What I don’t get is why isn’t their more anti-state, anti-elite violence out there? It certainly seems justified at this point (someone blowing up a vacant Goldman Sachs or Federal Reserve building would send just the right message to these crooks), and America has its fair share of rebellion throughout our history.

    It seems the two-party puppet system is very good at redirecting the public’s anger/frusteration to suit their own ends.

    “You just lost your job? An illegal immigrant got it! GRRRRR MEXICANS!”

    “Your son died in the war? Damn those murdering terrorists!”

    “You don’t like the rich and powerful? Then support our health and fincancial reforms (which were crafted and passed by struggling, working class people, of course. Barney Frank and Chris Dodd are average Joe’s!)!”

    1. What I don’t get is why isn’t their more anti-state, anti-elite violence out there? It certainly seems justified at this point (someone blowing up a vacant Goldman Sachs or Federal Reserve building would send just the right message to these crooks), and America has its fair share of rebellion throughout our history.

      Probably because most Americans don’t view violence as improving things?

      One of the few salutory things to come out of the past 10 years is to make terrorism uncool.

      Yes, we need to dismantle the current system. But we must dismantle the system in a way that produces a better one to replace it. Violent “messages” are counterproductive to that end.

  15. It seems the two-party puppet system is very good at redirecting the public’s anger/frusteration to suit their own ends.

    “Fannie mae and Freddy mac guaranteed trillions of dollars worth of crappy loans with tax payer money and by government direction? Damn the free market!!”

    “We gave 100s of billions of tax payer dollars to banks? Damn those bankers!!”

    “the economy is down because the government keeps changing the rules and creating uncertainty among investors and entrepreneurs? damn the rich people!! they don’t do anything!! lets tax em!!”

    I like this game.

    1. “BP had a terrible safety record in the oil industry with numerous violations spanning several years and known to have had a crappy record by the government agency who over sees oil drilling operations? Damn the oil companies for the oil spill!! Shut them all down!!”

      1. This one seems disingenuous.
        People are angry at BOTH the oil company and the government on this one. Damn the oil company for their (history of) reckless disregard. Damn the government for its lax oversight.

        1. Same dual anger works for the TARP, btw.

        2. This one seems disingenuous.
          People are angry at BOTH the oil company and the government on this one. Damn the oil company for their (history of) reckless disregard. Damn the government for its lax oversight.

          Obama shut down the whole off shore drilling industry not just BP. If he only shut down BP (and perhaps a few other operators with shitty safety records) I would not have written the above statement.

          Of course i stated that clearly here:

          Damn the oil companies for the oil spill!! Shut them all down!!”

          You are the one being disingenuous.

          1. Still don’t buy it…sorry. It ain’t like BP is the first oil company to show reckless disregard (even if they are the worst offender). People are more sophisticated than that. So for your sake I will restate…

            They are angry at both sides…the oil industry and the lax oversight.

    2. It’s like good cop bad cop, except both cops take turns slamming the desk drawer into your balls.

    3. the economy is down because the government keeps changing the rules and creating uncertainty among investors and entrepreneurs?

      Oh, THAT’s why the economy is down. You’ve explained it! Congrats.

      /sarcasm.

      1. Might not be the reason for “the downturn,” but it’s a significant reason that the economy isn’t rebounding.

        …and I don’t see team red or team blue as capable of doing much about it.

        1. it’s a significant reason that the economy isn’t rebounding.

          You are making the same mistake here. This is a just-so story you tell yourself to make yourself feel better. The causes are not known. Be more skeptical.

          1. That’s cheeky coming from someone who urges stimulus, stimulus, and more stimulus.

            1. When have I urged stimulus, stimulus and more stimulus?

              1. Constantly.

                1. Bullshit.

                    1. Typical Tulpa [sigh]

          2. Bullshit.

            A company’s growth is tied to production and productivity increases. For a substantial number of companies, outside investment provides the necessary capital to make this happen.

            So if I’m running a business, do I really know how health care reform is going to shake out for me? Will my current company provider jack up my rates if the individual mandate gets squashed? If I have to deal with filing tax forms for purchases over $600, how much are my admin costs going to increase? Should I be borrowing right now, or should I be paying off my representative so I get hooked up in the next round of stimulus? How are changes in the tax code going to affect investment moving forward?

            An intelligent investor asks these questions as well, especially if he’s looking long-term. Political uncertainty that can’t be resolved in the near term by either party makes investment risky, and I’m not looking to lose money with the economy already in the shitter.

            Uncertainty makes it difficult to calculate risk accurately. If you can’t figure out how that negatively affects the economy, you’re too stupid to suggest I’m telling myself feel-good stories.

            1. That is a more elaborated just-so story, but it is still a just-so story. It is an example of NN Taleb’s narrative fallacy. You are cherry picking the factor you like the best to explain a complex situation…it lacks veracity.

              1. Uncertainty makes it difficult to calculate risk accurately.

                It is the nature of the economy that makes it impossible to calculate risk accurately. Those who think they have a handle on how to calculate risk accurately are among the most dangerous risks in the economy, imho.

          3. You are making the same mistake here. This is a just-so story you tell yourself to make yourself feel better. The causes are not known.

            Yeah cuz when Poloci says “We need to pass health care to see what is in it” the first thing an employer is going to do when hearing that is hire 100s of new people and spend millions in capital improvements.

            You are an idiot Neu.

            1. You are gullible.

  16. Oh wow, OK that makes a lot of sense dude.

    Lou
    http://www.web-privacy.at.tc

  17. Punish bankers = problem solved.

    The rat, having been trained to work his way through the obstacle course and gobble the treats awaiting him at the end, should be punished for “stealing” the Rat Chow at the finish line.

    Stop me if you’ve heard this one before- “Incentives matter.”

    1. I was right, you guys are ratfuckers.

  18. More accurate: When you steal money, it’s illegal. When Congress steals money for you, it’s not.

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