If Goldman can so easily pay back the $10 billion in TARP money, does that mean they didn’t need the $13 billion we gave them in AIG bailout money all that badly?
More generally, if Goldman can use taxpayer largesse to get out of under the TARP restrictions, won’t that leave them nicely poised to cherry pick hotshots from the remaining banks that are?
Also, is Goldman having second thoughts about changing its status last year from an investment bank to a bank holding company, with all the benefits that brought during its hour of need?
Late Update: Just to follow up, this does sound like … well, maybe the ultimate regulatory arbitrage power-play, though not in the sense in which that term has been meant before. Quoting the Sorkin piece from this morning: “Paying back the TARP money would probably give Goldman Sachs a bigger lead over its rivals. With a Yankees-like payroll, it will continue to be able to steal the best talent from weaker firms that still have TARP money and are subject to restrictions on pay and the like.” So, as one reader points out, the point is precisely for Goldman to get out of under TARP — that’s clear — but also for everyone else to stay in, creating a completely lopsided playing field on the hiring front.
