With Sterling’s books dripping with red ink, the Fed told them to recapitalize and add assets to their balance sheet. First the Treasury Department gave them TARP money and then Sterling found an investment partner, Thomas H. Lee, to help them recapitalize. But as part of the deal, Thomas H. Lee said they needed to get the Fed to forgive $228 million of the TARP funds.
What this means is Sterling gets a gift of $228 million from the taxpayers to make up for their incompetent business practices.
What happened to free market capitalism where if you make poor business decisions you go belly up? Are the executives at Sterling going to take a pay cut to show their thanks? Not likely. If you have a mortgage with Sterling that is under water, are they going to forgive the debt? Not likely.
Where is the outrage from the tea party group about the socialism of giving $228 million of taxpayers’ money to Sterling Financial? It seems we have socialism when it comes to bailing out the banks and capitalism when it comes to helping people who have mortgages underwater.