Congress is about to destroy its Troubled Asset Relief Program (TARP) investment in America’s major financial institutions.
-The most productive employees of these institutions make well in excess of $250,000 a year.
-Most of these employees have an actual or implied contract that permits them to make compensation in excess of $250,000 per year based on achieving certain goals.
-These employees ride up and down the elevator every day.
-These productive employees are in high demand by other institutions and boutique firms.
-If their income is capped, there is nothing to keep the best employees at Goldman Sachs, Morgan Stanley, Citibank, Bank of America and AIG.
-They will leave these TARP institutions where their income is capped and take up new employment in non-TARP institutions where they can earn well in excess of $250,000.
-Those remaining employees making less than $250,000 are the least productive employees and will not be able to make these financial institutions survive.
-The most important asset these TARP institutions have is this group of productive employees. Without these employees, their business will not survive.
-If the Senate passes the same 90 percent tax bill that the House passed, there will be a massive exodus of productive employees from these firms to non-TARP firms and the TARP institutions will fail.
-The American taxpayer can then thank the U.S. Congress and president for throwing away $750 million of TARP investment in these financial institutions because their judgment is clouded by envy.
-I suggest every American short these financial institutions so they can recover the future tax increases required to cover this lost investment.
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