Re: The Great Bailout Backlash

> It was TARP that first turned Tea Partiers against Republican incumbents,

Nice to hear that repeated.  Let's hope it isn't forgotten.

> and independents against Washington. It was TARP that steadily undermined
> Barack Obama’s agenda, by making activist government seem like a game
> rigged to benefit privileged insiders.

well, duh!  And let us not forget that Obama (and McCain) voted FOR TARP
as a Senator.

> And it is TARP that’s spurred
> this campaign cycle’s only outbreak of bipartisanship: as of September,
> Politico’s Ben Smith noted recently, the two parties had combined to
> spend about $80 million on attack ads that invoke the bailout, with the
> Democrats alone accounting for $53 million of that spending.

"we're so sorry we did that TARP thing, we didn't mean it, please forgive
us, elect us back, it will never happen again!"

> The question is whether the program’s extraordinary unpopularity is
> justified. Few elected officials may be willing to argue for the bailout,
> but plenty of policy wonks will make the case (from the safety of their
> think tanks) that the Wall Street rescue package is actually “one of the
> most unfairly maligned policy initiatives of all time,” as the Center
> for American Progress’s Matthew Yglesias recently put it.

This is somewhat correct.  What really saved the bankers butts was the
reinstatement of "mark to model" accounting allowing the balance sheet
games and fraud to continue.  To this day the bad debt hasn't been written
down.

The TARP just gave them the cashflow needed to handle any additional bank
runs that proved unneeded once the mark to model was reinstated.

> This case was strengthened by the news that the bailout might actually end
> up costing the taxpayer less than $50 billion over all, rather than the
> $700 billion originally set aside to pay for it.

Yeah, and it has been recently uncovered that Geithner has been keeping 2
sets of books for the TARP program, one for PR changing the models for
calculating that are not approved by auditors.  But hey...what's real
anymore, certainly not financial statements, much less the dollar.

> Moreover, it’s the auto
> bailout, which the TARP funds eventually underwrote as well, that’s
> likely to end up being responsible for the bulk of these losses.

That is because it is more difficult to hide the losses when restructuring
manufacturing bankruptcy than it is with financial balance sheet games
where everything is legal.  The Auto's were forced to take some losses
since there are you know actual factory workers and tangible assets and
such.

> As it
> stands, the federal government may actually end up turning a modest profit
> on the money injected into Wall Street’s failing banks.

Don't believe it, that is a lie promulgated from the master of lies
himself.  Geithner.
So tell me, why do we now have over $1 Trillion in deficit per year?  You
think all those bond auctions went for stimulus?  Hardly.  If TARP worked,
why did our deficit grow?

> Given what seemed to be at stake in the fall of ’08, TARP’s defenders
> argue, that doesn’t seem like such a bad bargain: the bailout may have
> averted a Great Depression, and it didn’t end up costing very much at
> all.

It 'aint over yet.  In fact, nothing much has changed.  The can was just
kicked down the road a little, that's all.  And we've now accumulated a
massive load of debt.  We've just shifted the burden from the private
banks to the taxpayers (and still the banks have not been fixed).  This is
a bomb waiting to go off.

> The bailout became law because the legislative branch was stampeded with
> the threats of certain doom. It vested unprecedented economic authority in
> a single unelected official, the secretary of the Treasury. And it used
> public funds to insulate well-connected private actors from the
> consequences of their recklessness. Its creation short-circuited
> republican self-government, and its execution created moral hazard on an
> epic scale. It may have been an economic necessity, but it felt like a
> travesty nonetheless.

And let it not be forgotten the public outcry that caused TARP to be voted
down and defeated initially before it was resurrected by TPTB ignoring the
will of the people.

> What’s true in wartime can be true in economic policy as well, even if
> the stakes aren’t life and death. TARP may have saved the United States
> from 15 percent unemployment, but it also implicated our government in the
> kind of crony capitalism you’d expect from a banana republic. If it was
> necessary, it was also un-American. If it worked, it did so while doing
> grievous damage to the credibility of Wall Street and Washington alike.

This is just the gov't/bank propaganda talking points.  First off, we have
more like 20% unemployment already, but the gov't figures are complete
charades, and everybody knows it and agrees, but they keep citing it
anyway, unbelievable.

> So it’s a healthy and necessary thing that our first post-crisis
> election has been defined by a groundswell of anti-bailout outrage. This
> no doubt seems unfair to the politicians who may lose their jobs (or have
> already lost them) for doing what they felt they had to do. But it would
> be an infinitely worse sign for America if the present backlash hadn’t
> materialized at all.

You know, this is the 2nd election since TARP, not the first...and it is
STILL being used as an explanation for the public throwing the bums out.

regards,
-Lance


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