The ultimate in corporate welfare

What does it say about a country when some of its citizenry regards automobile workers as welfare recipients, but has little to say about the massive amounts of cash being given to banks with no strings attached:

At the Ritz-Carlton in Palm Beach, Florida, last November, John Hope III, the chairman of Whitney National Bank in New Orleans, stood before a ballroom full of Wall Street analysts and explained how his bank intended to use its $300 million in U.S. government bailout money.

"Make more loans?" Hope said. "We're not going to change our business model or our credit policies to accommodate the needs of the public sector as they see it to have us make more loans."

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Individually, banks that received some of the first $350 billion from the Treasury's Troubled Asset Relief Program, or TARP, have offered few public details about how they plan to spend the money, and they are not required to disclose what they do with it. But in conversations behind closed doors with investment analysts, some bankers have been candid about their intentions.

Most of the banks that received the money are far smaller than behemoths like Citigroup or Bank of America. A review of investor presentations and conference calls by executives of some two dozen banks around the country found that few cited lending as a priority. An overwhelming majority saw the bailout program as a no-strings-attached windfall that could be used to pay down debt, acquire other businesses or invest for the future.

Speaking at the FBR Capital Markets conference in New York in December, Walter Pressey, president of Boston Private Wealth Management, a healthy bank with a mostly affluent clientele, said there were no immediate plans to do much with the $154 million it received from the Treasury.

"With that capital in hand, not only do we feel comfortable that we can ride out the recession," he said, "but we also feel that we'll be in a position to take advantage of opportunities that present themselves once this recession is sorted out."

The bankers' comments, while representing only a random sampling of the more than 200 financial institutions that have received TARP money so far, underscore a growing gulf between public expectations for how the $700 billion should be used and the decisions being made by many of the institutions that have taken part. The program does not dictate what banks should do with the money.

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Mark Fitzgibbon, research director at Sandler O'Neill & Partners, which sponsored the Palm Beach conference, said banks seemed to be allocating the bailout money for four general purposes: increased lending, absorbing losses, bolstering capital and "opportunistic acquisitions." He said those approaches made sense from a business perspective, even though they might not conform to popular expectations that the money would be immediately lent to consumers.

"For the banking industry, this isn't a sprint, this is a marathon," Fitzgibbon said. "I think over time there will be pressure to lend that capital out and get a return for their shareholders. But they're not going to rush out and lend all that money tomorrow. If they did, they could lose it."

So instead WE lose it. So the bankers continue to get their fat paychecks, and if you're on the brink of foreclosure, tough tooties, folks. TARP was nothing but a giant scam -- a final payoff from the Bush Administration to its base -- the haves and the have-mores -- at the expense of the rest of us.

And somehow I'm not exactly confident that anything's going to change all that significantly with the head of the New York Federal Reserve taking over Treasury.