That's quite a bit of revisionist history. Much of the opposition came from people saying the banks/car companies couldn't be saved and it was throwing money down the drain because they would fail anyway. Really? I'd like to have seen other, cheaper solutions (remember, the cost here is $0) that would have prevented a global depression and saved millions of jobs as well as prevented a hundreds of billions in losses for the government from reduced tax revenues due to said depression, along with many billions in added costs for social services. I'm curious what your more productive use of $0 is. Or even $700B - I doubt there's anything you could come up with that would be more effective than what was accomplished.
This was you, two years ago, responding to what would happen without TARP: http://bbs.clutchfans.net/showthread.php?t=158831&page=3&pp=20 what would happen is you would see a huge downturn in the economy, unemployment would skyrocket, spending would go way down, and you wouldn't be able to get a loan for a while until the economy re-invented itself. Bad news. That's why they're doing it. I don't think anyone disagrees about that. I think what people are concerned about is all of that stuff is going to happen EVENTUALLY anyway, and if you start bailing everyone all you are doing is making the situation much worse and much longer and more painful 1 or 2 years from now. You were right about the first part of what would happen if we didn't do it and why it was necessary. However, as it turns out, the situation is NOT much worse or more painful 1 or 2 years from then (ie, now). And we avoided the huge downturn in the economy/etc. Things aren't good, but they aren't remotely as bad as they would have been. And all at the hefty price tag of $0.
I don't think the only issue is whether the financial companies pay the government back. They and perhaps Major would want to limit the issue to this. Are they going to encur risk again expecting to be bailed out? Are they using the new S. Ct created doctrine allowing them to buy Congress so that they can't be regulated? Are they spending money trying to keep screwing consumers with mortgages, credit cards, tricky extra charges etc. ? Though they would like it, I don't think tax payers should fund and or bail out this type of predatory capitalist enterprises. Even Goldman would have gone belly up without the tax payes bailing out all their counterparties and or insurance companies like AIG.
Of course I would - that's all TARP was designed for. TARP wasn't designed to address the underlying behavior - it was the immediate, emergency fix to the heart attack. This is all a separate issue and was the purpose of the financial reform bill. This part was addressing the heart attack survivor's eating habits. As would millions of blue-collar jobs and millions more people's homes.
Obviously I was mistaken about the first part. I wasn't aware of the full extent of the FED's powers back then. But the rest I feel vindicates me now. Here we are 2 years later sitting at 18% real unemployment with no end in sight. Debt has skyrocketed, the dollar is falling apart, China wants a new reserve currency, and Gold is at record highs. The banks aren't loaning money because they can get more by loaning to the govt. and the FED is still bailing them out through this and other under the table technical transactions. To make it better no substantive changes have been made to that sector either insuring that it can happen all over again. We're stuck in an economic limbo where "technically the recession ended 6 months ago, bla bla bla" spurred entirely by government spending is all our leaders can parrot back to us while the rest of us living in the real world are just waiting for the other shoe to drop before it all goes to hell. God help this country if we didn't have unemployment insurance. The welfare state has done a good job in that regard. The only thing which I didn't see back then was the Euro crisis which has bought us some time. But we are still staring into an economic black hole. Unless you think the economy is going to magically improve next year. Lost decade here we come.
http://www.huffingtonpost.com/dean-...092110&utm_medium=email&utm_content=BlogEntry Don't kid yourselves. The banksters aren't your friends.
via ThinkProgress -- The government’s Wall Street bailout has “provided taxpayers with higher returns than they could have made buying 30-year Treasury bonds.” TARP earned “$25.2 billion on its investment of $309 billion in banks and insurance companies, an 8.2 percent return over two years, a rate that “beat U.S. Treasuries, high-yield savings accounts, money-market funds and certificates of deposit.”
Even though I am a bit shocked the numbers turned out as they did and even more surprised that the Bush administration didn't send it all out the door before they left office, I still hate it. It was rushed through and the opportunity to put meaningful financial reform in place was ignored and subsequently lost. We've reformed on the margins but are still on the same path because the money grubbing big swinging dicks don't give a damn about the financial foundation of this country... only themselves... and they have created a skimming economy where most Americans get nickel-and-dimed to death in a system that is stacked against them and rewards cheaters and frauds if they happen to be able to do it on big enough scale. That system was ready to collapse and instead of looking at the future and creating a system that might work for everybody, we were too concerned with their whining and did nothing but prop them up. Bastards.
agreed RIM. It's like hearing FFB suggest driving home drunk was a great idea because he made it home OK and saved cab fare. I miss those threads .
Bush claims to have done it on purpose as a parting gift for Obama, who later used the funds for mortgage relief and a problem Bush punted, the auto bailout. I totally agree, but ever since we went on the road of Trash for Cash with the Bear Sterns bailout, the rescues were predicated on the bet that the troubled assets would rise. By trading treasury notes with value for volatile and possibly worthless collateral (in the end, it made more money), the government was at a point of no return. With nationalization or a government receivership it was very likely those corporations assets would've reflected a far lower price once we opened those black boxes. Then, by being wed to the system, we eliminated mark-to-market accounting requirements. Stocks rise. Banks willing and ready to pay back tarp. What's outrageous for me was during TARP, congress was promising "payback" later down the line only for the FinReg laws to be written by the likes of Dodd and Schumer. None of the laws provide any clear provisions against too big to fail. They're more like suggestions. None are ready to put the boot down on casino-like betting. It's surprising how people forget so quickly. It shouldn't be, but it still is.
This was such an obvious set-up that numerous folks called it perfectly. The Major's of the world argued that there was no time for such punitive measures. Not surprisingly, they got taken for a ride by the corporate-fascist power structure that drives the American economy.
Even thought he government may get all the money back, I am upset with TARP. The banks have become a drain on society. Dean Baker said it best in this piece.. http://seekingalpha.com/article/228230-the-cost-of-tarp-one-more-time
only feasbile solution i see to all that is to nationalize the banks. if We the People are to take all the risk when things go sour, we should share in the reward when things are sweet.
What specifically do you dislike about FinReg? There are a LOT of good things in there that deal with future failures. There are a lot of things in there the limit risk taking. Between that and Basel III's new capital requirements, the chance of failure is dramatically reduced. No offense because I'm not referring to any specific person here, but a lot of the FinReg complaints remind me of the Health Care complaints - a bunch of "it sucks" but people don't seem to have specifics. They read an article - in health care's case, from the far right; in FinReg's case, from the far left - of people unhappy with it and then repeat that it must be terrible. But the far left wanted destruction of the banking system - that's not what FinReg was meant to do or should do.
Today, the Fed released some info... (Remember, TARP was only about 2% of the total bailout. http://www.sourcewatch.org/index.php?title=Total_Wall_Street_Bailout_Cost) A few folks are looking at these transactions carefully. Here are some comments... Trillions.
U.S. stocks soared into December on Wednesday, rising more than 2% as investors looked for good news from Europe and found solace from the latest domestic economic numbers. ...the U.S. added 93,000 private-sector jobs in November
Yay! At that rate, it will take 14 months to employ just the Americans whose unemployment benefits will run out between now and Christmas.
Even more... (Both from here: http://www.huffingtonpost.com/2010/12/01/federal-reserve-documents_1_n_790433.html)
