Commentaries

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from Rolfe Winkler:

Is Conan O’Brien a $40 million bailout recipient?

Conan O’Brien is expected to receive some $40 million for leaving NBC, the media unit of General Electric, itself among the largest recipients of taxpayer help. While it would be a stretch to compare the late-night talk show host to a Goldman Sachs or Citigroup banker, he’s arguably only a few steps removed.

Though the conglomerate wasn’t a recipient of direct equity aid from the Troubled Asset Relief Program, GE availed itself of perhaps an equally important bailout facility, the Temporary Liquidity Guarantee Program overseen by the Federal Deposit Insurance Corp.

Participants in this scheme were able to issue debt with a government guarantee, receiving explicit taxpayer backing in the event of default. Though GE was just one of 88 firms with outstanding Uncle Sam backed debt as of October 31, its $60 billion of issuance accounted for nearly a fifth of the total.

Unlike some of the banks that received direct equity injections from the government, GE can argue it does not deserve the same scrutiny over compensation that has bedeviled financial companies including Citigroup, Goldman and American International Group.

Goldman needs to retire its FDIC-backed debt

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If Goldman Sachs wants to go back to the future and keep setting aside record sums of money for compensation and year-end bonuses, it should first retire all of its oustanding FDIC-backed debt.

The big investment firm has issued some $22 billion in longer-term debt under the Federal Deposit Insurance Corp.’s Temporary Liquidity Guarantee Program. Goldman sold most of those notes during the height of the financial crisis, when the bank desperately needed to raise capital like most other financial institutions.

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