Via ABC’s The Blotter: JPMorgan Chase To Spend Millions on New Jets and Luxury Airport Hangar
Embattled bank JPMorgan Chase, the recipient of $25 billion in TARP funds, is going ahead with a $138 million plan to buy two new luxury corporate jets and build “the premiere corporate aircraft hangar on the eastern seaboard” to house them, ABC News has learned.The financial giant’s upgrade includes nearly $120 million for two Gulfstream 650 planes and $18 million for a lavish renovation of a hangar at the Westchester Airport outside New York City.
I honestly stand amazed that the leadership of these companies think that such projects can be pursued in the current climate.
Surely the bottom line is obvious: if a company needs federal bailout dollars, then it can’t do things like buy new private jets and spend money on luxury hangar upgrades.
The defense, as given in the piece is quite lame:
Joseph Evangelisti, a spokesman for JPMorgan Chase, said no TARP money would be used to make any payments for new jets or jet hangar improvements. He refused to comment on whether JPMorgan had put a down payment for new planes, saying only that any future jet purchases would be part of its normal aircraft replacement policy, and that JPMorgan Chase will repay all TARP money before it makes any payments for new planes or renovations.The spokesman also said the bank would have nine years to make its $18 million in renovations, but the county told ABC News that JPMorgan Chase’s plans indicate that renovations would be complete within six months of assuming the lease.
But, of course, money is a fungible asset and the money being used for the planes and hangar could have been used to lessen the need for the TARP funds/if they weren’t getting the TARP funds, they probably couldn’t afford the planes and hangar upgrades. Indeed, sans bailout funds there is a legitimate question as to whether the company would be able to survive.
Again: if one is getting huge sums of federal bailout funds, one ought to immediately start economizing.
It is unclear from the piece as to the degree to which these obligations are contractual ones that predate TARP. If, like the AIG bonuses, they are, it further highlights the sloppy nature of the ongoing government bailout. If bankruptcy proceedings can legally lead to the reassessment, if not cancellation, of pre-bankruptcy contracts and obligations, then some sort of similar provision should have been included in the various bailout policies. If the taxpayer is expected to pony up trillions of dollars to clean up the messes that have been made, then it is hardly unreasonable that the recipients of these funds to have to make concessions. The problem is, it would seem, that no one in the government is taking the time to think these things through before they dole out the cash.
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March 23rd, 2024 at 11:49 am
“I honestly stand amazed that the leadership of these companies think that such projects can be pursued in the current climate.”
It’s called ‘lack of credibility’. Unless and until some Wall St CEO’s get the ‘13 steps up and 1 long step down’ treatment, they’ll take all the money that they can pry from us, spend it and laugh at us.
March 23rd, 2024 at 8:28 pm
[...] is less enthused than Michelle is; Doctor Steven Taylor of Poliblog (Centrist) agrees this is corporate stupidity; And of course my twin brutha from anuthah muthah, Matthew O’Keefe of Papamoka Straight Talk, [...]