Go to PDF Version | Go to Recent Issues
To save time in the future, you may select one of the preferences below. You may update your eIBD preferences at any time by going into My IBD and selecting Update Your eIBD Preferences.
Set Web-Based Version as Default Set PDF Version as Default Set Recent Issues as Default
Get QuoteSearch Site
Daily Graphs Online
The Department of the Treasury has been waging a charm offensive on behalf of America's most memorable bailout mechanism — the Troubled Asset Relief Program. As Treasury's authority to make new commitments under TARP expires on Oct. 3, it's worth taking a look at what the taxpayers actually got in return for their involuntary $700 billion investment.
To paraphrase one of Mark Twain's famous quotes, "The rumors of TARP's demise are greatly exaggerated." Despite what you may hear, TARP isn't profitable and hasn't actually ended.
In September 2008, our financial markets suddenly froze, and there was fairly universal consensus that Congress needed to act. Even as a fiscal conservative, I agreed that Congress had to apply — in a targeted and temporary fashion — the full faith and credit of the United States to address one of the first truly emergency situations I had seen since coming to Congress.
That doesn't mean that TARP was the best solution or that it should have lasted as long as it has. In fact, I co-authored an alternative that would have been more effective and less injurious to our economy.
I opposed TARP because I feared 1) it would not be used for its intended purpose of financial stability; 2) political considerations would drive decision-making; and 3) it would produce a never-ending cycle of bailouts that would ultimately harm our free enterprise system and impose huge debts on future generations. My fears have proved well-founded.
What started as an emergency capital injection to thaw frozen credit markets in the midst of a financial panic morphed into a revolving bailout fund to advance the administration's political, social and economic agenda.
TARP is characterized by the ill-advised AIG bailout that afforded foreign counterparties with 100 cents on the dollar, the logic-defying classification of GM and Chrysler as "financial institutions" and the administration's abysmally unsuccessful Home Affordable Modification Program (HAMP).
Despite any psychologically calming impact TARP may have had on the market in 2008, it is impossible to measure its success accurately. TARP didn't happen in a vacuum, but alongside unprecedented efforts made by Treasury and the Federal Reserve, outside of TARP, to prop up the mortgage and housing markets.
As we approach the program's second anniversary, some have been talking about TARP as though it is a great success. In an August op-ed "Welcome to the Recovery," Treasury Secretary Timothy Geithner touted the program saying: "The government's investment in banks has already earned more than $20 billion in profits for taxpayers, and the TARP program will be out of business earlier than expected — and costing nearly a quarter of a trillion dollars less than projected last year."
It is a common scenario: Career politicians spend a lifetime in office accumulating authority, influence and money. If the voters from their political party dare to choose someone else, they leave the party and run as independents. Such people usually characterize their life in politics as "public ...
'The fundamental problem we face is that we can only distribute and consume what is actually produced." Leonid Breznev, Communist Party Congress, 1972. Decisions by households about how much of the paycheck to spend and how much to save reflect expectations about their longer-term ability to ...
Sen. Harry Reid has decided to end consideration of a bill to stop a massive tax increase on all Americans effective January. Instead he will have the Senate take up the "Creating American Jobs and Ending Offshoring Act," which would, among other things, increase taxes and compliance costs for U.S. ...
Like millions of Americans, Delaware Republican Senate nominee Christine O'Donnell has had trouble covering her mortgage and other bills over the years. Her opponents consider this a scandal of disqualifying proportions. But there's a bigger disgrace: It's all the sanctimonious Democrats who have ...
Henry Ford more than doubled the average wage of his workers to five dollars a day in 1914 and started selling more cars. This led to the persistent belief that Ford paid higher wages so his workers could buy more Fords. Despite being transparently silly, this belief continues to resurface as a ...
Posted By: BaltimoreJoe(2625) on 10/3/2010 | 2:03 PM ET
Among banks that received TARP funds, employee pay rose, cost-cutting was limited, and lending fell. What a success. http://www.usatoday.com/money/industries/banking/2010-04-21-tarp-banks_N.htm
Posted By: kwg1(430) on 10/1/2010 | 9:51 PM ET
The Congressman tells us "Taxpayers shouldn't be losing any money to begin with." He is right and as his next sentence is supposed to give us trust that the Congress put that concept in the legislation which passed as TARP, right? NO! They maximized overall returns but not for 100%! And they did minimize impact on National Debt 66 Billion to date! No violation of the law here! What should the language read? "All moneys plus interest should be repaid to the treasury for TARP monies given"!
Posted By: Imprimis(280) on 10/1/2010 | 8:04 PM ET
When is rewarding failure and punishing success a good thing? CONgress expects us to believe that if the TARP recipients were left to fail and file for bankruptcy that there would be none to fill their place? Let's see, how many millions are unemployed? Wasn't TARP supposed to prevent unemployment from getting worse? Who still has a 401K, err 201K? Wasn't TARP supposed to prevent that? Let's all forget 200+ years of business law"¦ Bailout Blockbuster.
Register
Distribution can clue you in to the broad market's topping action.
Get QuoteSearch Site
Read Full Article »
