Tuesday, October 26, 2010

Tea Partiers Are Wrong On TARP

Actually, it's not just Tea Partiers--anyone who thinks TARP was the wrong thing to do--is just plain wrong.  Here's a decent overview of the bidding by Ross Douthat in the New York Times.  TARP saved the world banking system.  TARP was and is the only piece of legislation passed to address our country's financial morass that has actually made a difference.  Of the $700B allocated, the program will ultimately cost only $50B, with that loss coming from the auto industry's time at the TARP trough.  The banks?  They paid interest--the taxpayers made money.

I realize I'm probably in the minority in the Republican Party when I write in support of TARP.  I realize it is great fun to demonize Wall Street and say that they should have let banks fail--but we are far better off for government intervention in a crisis ridden market than we would have been if Congress did not act.  Of course, Congress should let businesses fail--99% of the time.  Of course, Congress should stay out of free markets--99% of the time.  Of course, Congress should let automakers fail--ok--on this one, it ought to be 100% of the time.


Bill said...

I agree with you on this. The one area that I find fault with TARP was the lack of controls on senior executive pay for taking the money. From my point of view, it's no longer straight stick capitalism if your company is asking the government for billions to keep you from going under. If the companies balked at the restrictions they could have always gone to the market for assistance.

"The Hammer" said...

This is a tough issue and one I still don't have a handle on.

In the '80s American banks got into trouble lending to Mexico. They asked for a bailout. Reagan told them to take a hike. In the '90s much the same thing happened but this time Clinton said sure, why not? Clinton always was a Machiavellian and I'm sure an understanding was reached (campaign cash etc.).

Don't like bailouts period. I think I'd prefer a crash; we'd probably be out of it by now and the right people would have lost their asses... instead of us.

But having said that, TARP I might can live with but the stimulus I can't. This was just borrowing incredible amounts of money to spread around to Democratic constituencies (unions, special interests, welfare bums, crack whores, gay bathhouses, and government workers across the land). Subsidizing communists and bums is insane!

Mudge said...

Hammer - how dare you malign crack whores and gay bath houses by grouping them in with unions and government workers.

Bill said...

The short term pain of TARP for Wall St. was a necessary evil. I don't like the idea of taxpayer funds being used to bailout companies that were not well run but are considered "too big to fail." The use of taxpayer money to purchase GM so that union members would be protected is galling. When all is said and done, Wall St. will have paid off their debt to the government with interest. We are never going to see GM pay the government back completely.
What is worse is that Ford, having revamped their product, mortgaged themselves to pay for restructuring using private money is now competing with GM, with no debt thanks to Uncle Sammy.

Mudge said...
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