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A brief moment on a weekend show illustrates the way the notorious 2008 bailout is increasingly not acknowledged

Cross posted from Pruning Shears.

On last Sunday's "Up With Chris Hayes" there was a discussion about political calculations for Republicans.  The question was whether to work with Democrats or go with straight obstructionism.  At one point Hayes said:

Bob Bennett was a fairly conservative senator from Utah, right, of long standing, he was not some super lefty heterodox guy, right? And his huge heterodoxy was that he had cosponsored a health care bill with Ron Wyden. It was not the health care bill that actually got passed. It was called the Wyden-Bennett, and in fact, a lot of Republicans later said, well, we really like Wyden-Bennett, right? But what happened to Bob Bennett just for cosponsoring this health care bill? He went back to Utah and got booted out in that state's Republican convention after serving, what, two or three terms, OK.

Something really big is missing from Hayes' observation: TARP.  Granted, he was talking about Republican political strategy and not giving an overview of Bennett's career.  The exact details of the unhappiness of Utah's GOP base is not central to his point, and their unhappiness over Bennett's partnering with Wyden serves Hayes' point adequately.  Hayes could probably say (with good reason) that it would have sidetracked the discussion to go into details about Bennett's defeat when it was merely being used to give a brief illustration of a larger point.  Fair enough.

Still, I notice when a national-level analyst fails to mention TARP when the opportunity arises.  TARP is unique in our recent history: A moment when activists on both the left and the right united in furious opposition to something happening in Washington.  Over the last generation or so, the issues that have drawn the most passionate responses - protests in the run up to the Iraq war, opposition to immigration reform, Occupy Wall Street, the Tea Party movement (the latter two in part a response to the corruption represented by TARP), etc - all of them were predominantly driven by either the left or the right.  With one exception.

Everyone hated TARP.  It was not left versus right, but outsider versus establishment.  Democrats and Republicans in the capitol supported it.  DC-based reporters and analysts assured audiences that it was distasteful but necessary.  (This was typically accompanied with a false choice of doing nothing or letting civilization collapse.)  All the players inside the Beltway were heavily invested in it, but outside the hothouse it was loathed and reviled.  It was unpopular across the political spectrum.  On what other issue has that been true?

TARP was unpopular in part because it was terrible policy (see below) but also because it was symbolic.  It stood as the tip of the iceberg, the visible part of a much vaster body of sketchy deals.  Few knew the details, in part because much of it was done behind the scenes, but in part because of obfuscation.  Those who weren't experts in high finance (i.e. almost everyone) were left with a sense that something wasn't right, but we couldn't keep our eye on the queen of hearts.

This 2011 exchange (PDF) between Congressman Sean Duffy and Federal Reserve chairman Ben Bernanke is a great illustration - a classic of the "if you can't dazzle them with brilliance" genre:

Mr. DUFFY. ...Let me move on to a different question. We had talked about the QE2 with Dr. Paul. When you buy assets, where does that money come from?
Mr. BERNANKE. We create reserves in the banking system which are just held with the Fed. It does not go out into the public.
Mr. DUFFY. Does it come from tax dollars, though, to buy those assets?
Mr. BERNANKE. It does not.
Mr. DUFFY. Are you basically printing money to buy those assets?
Mr. BERNANKE. We are not printing money, we are creating reserves in the banking system.
Mr. DUFFY. In your testimony - I only have 20 seconds left - you talked about a potential additional stimulus....

What jumps out at me is not that, as some have noted, Bernanke repudiates our central political myth that government can only spend money it raises through taxes.  (Government, unlike households, can print more money when it wants to.)  Nor is it that Bernanke's "we are not printing money" line directly contradicts his recent position on the matter.

Instead, note the ease with which Bernanke shoos Duffy away from an inconvenient line of discussion.  Duffy could have shot back, "'creating reserves' being 21st century bankerspeak for printing money, right?"  He could have stayed on that and gotten Bernanke to admit that adding zeroes to balance sheets is just a high tech way of printing money, then excoriated Bernanke for his weaselly parsing of language.  But Duffy, like most of his fellow citizens, doesn't understand finance well enough to pounce on Bernanke's evasive euphemism.  Instead he just says, well I'm almost out of time so on to other topics.1

Yet even without the follow up, the exchange leaves the impression, just like TARP did, that something was hinky about it, that we didn't know all the details but that it didn't pass the smell test.  That vague distrust of high level banking officials is one of TARP's legacies - as is the codifying of impunity for financial elites.  TARP formalized government support of big banks, which meant the people running them had to remain in place, which meant they could not be held liable for any kind of criminality.  Too big to fail for institutions has led to too big to jail for executives.  The moral hazard recriminations from TARP have been absolutely catastrophic.  Defenders of TARP rarely try to account for that cost (or for the institutional value of a government guarantee).

The extraordinary actions taken by officials are also part of the public's concept of TARP.  This includes so-called Structured Investment Vehicles like the odious Maiden Lane II (with its 100 cents on the dollar payout to AIG counterparties), for example.2  It encompasses regulatory forbearance, banks being allowed to print money (oops - create reserves), and the now-certain government promise of solvency.  As are the promises made at the time that have come to nothing, the regulatory paralysis, and general descent into banana republic-style institutions.  All of that is TARP in the popular imagination, and for good reason: it's all of a piece.

There have been quite a few attempts to reframe it as good policy, none of them rigorous or convincing.  The most notable on my reading list came from Steve Benen; here is one example.  The key in this formulation is to look at TARP in isolation, and to only account for the dollars sent out and repaid.  And also ignoring that the dollars sent out were considerably more robust than the ones repaid.  Those talking points got batted down pretty quickly though, and for the most part no one is trying to sell TARP as good policy anymore.  (The exception is the unconquerable wankery of Matt Yglesias, who writes with the smooth assurance of one who never considers an idea he does not find congenial.)

So being linked to TARP has been toxic for politicians of all stripes, and for good reason.  In the first election cycle after it, Republicans paid a particularly heavy price (it haunted them in 2012 as well).  When TARP wasn't mentioned as the main cause of primary losses it was still described as the catalyst.  And while Bennett told Hayes that health care reform had as much to do with his loss as TARP, look at the interview he gave NPR immediately after his loss.  He mentions TARP first, last and multiple times in between.  Yes he mentions other factors as well, but he clearly characterizes TARP as the albatross around his neck.

TARP was an enormously consequential program, it was terrible policy, and it became verbal shorthand among the non-wonkish general public for a whole raft of opaque and tricky bailout schemes for the criminals who looted the economy.  That sort of thing tends to linger in the memory.  Political and media elites of all ideological stripes would prefer not to talk about it because it is such an obvious indictment of their established institutions, but that doesn't mean the rest of us have to look away.

I tend to have a heightened awareness for curious omissions of TARP.  I don't think individual examples can have motives assigned, and in Hayes' case it just seemed like a tangential point that didn't get touched on.  I might have felt better if I thought there was some nefarious intent though.  At least then there would be an implicit acknowledgement that something big was being ignored.  Instead we have a situation where the powers that be would rather not talk about it.  The best way to not talk about it is to not think about it.  The best way to not think about it is to forget it ever happened.


1. Like many of his Republican colleagues, he has confused cantankerous badgering with tenacious pursuit (and semi-random, blunderbuss criticism with knowledgeably drilling down on a particular point).

2.  This report (PDF) from the TARP inspector is worth looking at, too.  If nothing else try to read the paragraph beginning "Despite this initial Government assistance" - it gives a nice illustration of the "TARP as tip of the iceberg" dynamic.

Originally posted to danps on Sat Feb 09, 2013 at 03:46 AM PST.

Also republished by Community Spotlight.

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Comment Preferences

  •  What we might have heard: (8+ / 0-)

    Mr. BERNANKE. We are not printing money, we are creating reserves in the banking system.

    Mr. DUFFY. Reserve creation means that you're giving banks more money to lend.

    Mr. BERNANKE. Well, yes.

    Mr. DUFFY. You're giving banks money, then.

    Mr. BERNANKE.  Yes.

    Mr. DUFFY.  How is that different in results from printing the money and giving it to them?

    Mr. BERNANKE.  We're...uh...not printing money.

    Mr. DUFFY.  How is that different in results from printing the money and giving it to them?

    Mr. BERNANKE.  We're not printing money.

    Mr. DUFFY. I know you're not printing money.  That's not what I'm asking.  What is the difference in RESULTS?

    Mr. BERNANKE.  It's not paper.

    Boehner Just Wants Wife To Listen, Not Come Up With Alternative Debt-Reduction Ideas

    by dov12348 on Sat Feb 09, 2013 at 03:59:27 AM PST

  •  "everyone hated TARP." (5+ / 0-)
    Recommended by:
    VClib, HamdenRice, doc2, FG, auditor

    I thought everyone but teabaggers and firebaggers supported it.  eg, the dippy left and dippy right had a moment where they could hold hands and sing kumbaya, but support was widespread outside of those groups.  I could totally be wrong, but that's how I remember it.

    •  assf (3+ / 0-)
      Recommended by:
      VClib, Bisbonian, WinSmith
      Nearly eight out of 10 Americans — 78% — say Congress should approve a historic bailout of the nation's financial markets, but most want lawmakers to significantly modify the Bush administration's $700 billion plan, according to a new USA TODAY/Gallup Poll.
    •  I remember the (6+ / 0-)

      first vote on it failing - and failing in the face of overwhelming and vociferous support from the political establishment and Wall Street.  Less than half polled supported taking any action even in the face of the most dire warnings imaginable.

      It was broadly unpopular, and not just among activists.

      •  After the first vote failed (1+ / 0-)
        Recommended by:

        the stock market plunged, and up in smoke went 1/3 of my 401K retirement.  (The other 1/3 loss was coming shortly).
        I remember the 2nd vote stopped the plunge, so I was over the cliff but still clinging to the side holding on to roots and bushes.  

    •  Everyone stupid hated TARP (4+ / 0-)
      Recommended by:
      doc2, shrike, Nice Ogre, grasshopper

      Smart people who actually knew the terms thought it was a super sweet deal for the government -- 5% dividends on preferred stock, plus warrants to re-capture almost 100% of the value of the recovery of bank stock.

      Plus it was distributed to hundreds of small credit unions and community banks on Main Street.

      •  And then you wonder (4+ / 0-)
        Recommended by:
        MarciaJ720, Dburn, ozsea1, NoMoreLies

        why Republicans call you an elitist?

        ¡Cállate o despertarás la izquierda! - protest sign in Spain

        by gjohnsit on Sat Feb 09, 2013 at 07:33:14 AM PST

        [ Parent ]

        •  TARP was drafted by Barney Frank (1+ / 0-)
          Recommended by:

          one of the most liberal Democratic members of Congress, based on a model created by the British Labour Party's Prime Minister, Gordon Brown.

          I know that it feels good to an emo-prog to hate TARP, but that hate isn't based on facts.

          •  you're's based upon experience (1+ / 0-)
            Recommended by:

            Not sure what your line of business is, Mr Rice, but TARP did nothing for me.  Emoprog that I am.

            I don't care who drafted it.  It still amounted to mostly little beyond deepthroating Wall Street.

            Oregon:'s cold. But it's a damp cold.

            by Keith930 on Sat Feb 09, 2013 at 02:01:13 PM PST

            [ Parent ]

            •  You and DBurn, gjohnsit just don't understand (1+ / 0-)
              Recommended by:

              the purpose of TARP was to save the DEPOSITORS!  Not the banks!

              The system needed liquidity which is TEMPORARY.  I had my deposits at Bank of America (no more though) and a bank run was mere weeks away.

              "The way to see by faith is to shut the eye of reason." - Thomas Paine

              by shrike on Sat Feb 09, 2013 at 02:44:30 PM PST

              [ Parent ]

      •  You Mean It wasn't all paid back? (5+ / 0-)
        plus warrants to re-capture almost 100%
        My God what a surprise.

        You know,  I didn't realize that there was anyone on here that still supported Bush and Treasury Sec Paulson. Hell , even the GOP rejects Bush. But you say all the "stupid" people were against TARP .

        As 100s of  Books , documentaries, articles , complete blogs and a 1000 diaries from gjohnsit, Bobswern and Badabing1  demonstrated beyond any reasonable doubt, TARP was merely the kick-off for the largest single on going Bail out of the financial sector mostly via the FED, the largest heist in history and the official start of the fuck the poor movement, where Social Security, once the third rail of politics, became a welfare like entitlement that must be cut to pay for more and more bail-outs. .

         The TARP Pay Back was a "watch over here" moment as in watch over here as we take 2% of the bail out and give it back to the govt and declare victory in saving FIRE.

        1.  I may be exaggerating the Kos diary count here but I'm not exaggerating their commitment to getting to the real truth behind all the Bullshit you apologists put up here
        •  Hamden Rice is correct. (0+ / 0-)

          And yes, there were thousands of stupid diaries.

          "The way to see by faith is to shut the eye of reason." - Thomas Paine

          by shrike on Sat Feb 09, 2013 at 02:30:30 PM PST

          [ Parent ]

          •  I could see a youngster (1+ / 0-)
            Recommended by:

            with a low IQ and extreme attention defict disorder saying something like this

            Hamden Rice is correct. (0+ / 0-)
            And yes, there were thousands of stupid diaries.
            But's it difficult for me to imagine how anyone who navigated the tricky process of signing up to this site could possibly refer to the financial diaries over the bail out and the subsequent heist as stupid.

            So , really, how do you get in here and how hard was it for your dog to teach you how to type...?

    •  Everyone hated HARP, as long (2+ / 0-)
      Recommended by:
      HamdenRice, shrike

      as "everyone" is defined as people on the far left and the far right. Those who think that the financial system could have been allowed to fail but that Main St. would have been just fine were luckily not in charge at that moment.

      •  False dichotomy (4+ / 0-)
        Recommended by:
        Dburn, danps, codairem, NoMoreLies

        It was not necessary to let the financial system fail. It could have been nationalized and restructured into a system that meets societal needs rather than Big Banksters' needs.

        But these are the Owners we are talking about. They don't get nationalized and restructured and go to jail in their own persons. They Own the politicians and the government does whatever they tell it to do.

        And there is no "within the system" political process that can change this, because these are Owners of the system.

        There is only one way to change such a system, and I believe it is a bannable offense here to advocate it. However, the Owners have that approach pretty much blocked off too: why do you think the nation is full of fascist gun nuts -- both with and without police badges? In the event of a populist uprising, an openly fascist military dictatorship would be declared, tanks and hellfire missiles would be used against the insurrectionists, and Order would soon be established -- with the same Owners in charge.

        In short, the corporate feudal era is here. The Owners are the new Feudal Lords, and we are their serfs. The government is the means by which they control us, and so long as a government with decorative trappings of the former democracy-for-some can maintain order, they will allow that government to continue. The moment it can't maintain order, they will replace it with one that can - and that has no such decorative trappings.

      •  That's a false dichotomy (2+ / 0-)
        Recommended by:
        NoMoreLies, Whatithink

        The financial system could have been saved without handing them over a trillion (when all was said and done) dollars.

        Most of us would be better off today if the insolvent institutions had been allowed to fail with small depositors being paid out by FDIC.  The only people who really benefited were the major shareholders in those institutions, and while it is true that 401(k) funds are often heavily invested in those entities, it is also true that 401(k) funds are... well, still heavily invested in those entities of dubious solvency.  

        TARP hasn't even played out yet.  The money hasn't been "paid back."  People who believe that are dumb.  Basic arithmetic shows that it would be impossible to pay back that much money that quickly.  It's all smoke and mirrors.  Those institutions that were bailed out are still playing eye-of-newt and hair-of-maiden financial games with our nation's wealth, and the wound festers, having been covered up temporarily; it was never really healed as it would have been by REMOVING THE TUMOR, i.e., letting the banks fail and die a natural (and deserved) death.

  •  I've never understood why the libertarian loonies (9+ / 0-)

    are so obsessed with this "printing money!!!!!" thingie.

    Yes, governments print money.  That's why they have mints and treasuries. So what?

    Inflation has been less than 3% for years now. All the arm-waving about "hyper-inflation!!!!!" is silly. Just stuff to scare the "buy gold now !!!!!" crowd with.

    •  They Think Money is Gold and Can't be Printed, (3+ / 0-)
      Recommended by:
      johnny wurster, US Blues, NoMoreLies

      just as they think our system is the Articles of Confederation where states are sovereign and have rights.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Sat Feb 09, 2013 at 04:40:30 AM PST

      [ Parent ]

      •  gold itself is "fiat money" (4+ / 0-)
        Recommended by:
        doc2, FG, Chi, NoMoreLies

        It's only "money" because people SAY it is, and are willing to accept it as such.  Gold has no intrinsic property that makes it "money", any more than tin or copper or lead does.

        For people who wave their arms and claim to be experts on a "free economy", the libertarian loonies don't know the most basic things about economics (such as "every expense is someone else's income").

        Why anyone even pays them the slightest attention, is beyond me.

        •  Gold is not fiat (2+ / 0-)
          Recommended by:
          Dburn, ozsea1

          You obviously don't understand what the word "fiat" means. Look it up for yourself.

          ¡Cállate o despertarás la izquierda! - protest sign in Spain

          by gjohnsit on Sat Feb 09, 2013 at 05:48:20 AM PST

          [ Parent ]

          •  gold is fiat (0+ / 0-)

            It's money because we SAY it's money.

            If you disagree, by all means please explain what it is that makes gold inherently money, and not, say, tin or lead.

            •  OK, I will look it up for you (2+ / 0-)
              Recommended by:
              Dburn, ozsea1

              Fiat: 3
              : an authoritative or arbitrary order : decree [government by fiat]

              Fiat Money: Fiat money is money that derives its value from government regulation or law. The term fiat currency is used when the fiat money is used as the main currency of the country. The term derives from the Latin fiat ("let it be done", "it shall be").

               These definitions obviously don't apply to gold. Period.

              ¡Cállate o despertarás la izquierda! - protest sign in Spain

              by gjohnsit on Sat Feb 09, 2013 at 06:16:57 AM PST

              [ Parent ]

              •  right. gold is money because we SAY it is by fiat (0+ / 0-)

                Indeed, our paper money was at one time entirely convertible to X amount of gold---because the government said so. By ending the gold standard, the government just replaced one fiat with another.

                Again, if you disagree, then please by all means explain to me why gold is inherently "money" and tin or nickel is not.

                •  One last try (2+ / 0-)
                  Recommended by:
                  Dburn, ozsea1

                  Gold is not fiat because the government has not declared it to be money. Instead they declared paper to be money. Simple as that. Period. End of story.
                     The definitions above make that abundantly clear. If you can't understand that then there is no point continuing this conversation.

                    As for why gold is money (a totally different subject than the one we are discussing), the reasoning is also simple (but not for reasons of it being fiat).
                     Gold is money because anything a central bank holds in its vaults is money.
                    The value of the cash in your pocket or bank account is based on the backing of the central bank. Without the central bank your cash is worthless.
                     And right now the central banks of the world at buying gold by the hundreds of tonnes.

                  ¡Cállate o despertarás la izquierda! - protest sign in Spain

                  by gjohnsit on Sat Feb 09, 2013 at 06:32:52 AM PST

                  [ Parent ]

                  •  They have not declared it to be money, recently (0+ / 0-)

                    But they have, in the past.  And they set a price.

                    "We refuse to fight in a war started by men who refused to fight in a war." -freewayblogger

                    by Bisbonian on Sat Feb 09, 2013 at 06:41:55 AM PST

                    [ Parent ]

                    •  right. US money used to be convertible to gold (1+ / 0-)
                      Recommended by:

                      They could just as easily have declared it, by fiat, to be convertible into tin, or apples, or jaguar teeth.

                      There's nothing inherent about "gold" that makes it "money", other than the fact that people in authority have, historically, declared it to be money.  By fiat.

                      Most of the reason why gold has been used as money is practical.  It doesn't tarnish or corrode, it is easily subdividable, and it is easily minted into coins because it is malleable.  And it's rare enough that people can't usually get rich just by finding it.

                  •  absolutely right (0+ / 0-)
                    Gold is money because anything a central bank holds in its vaults is money.
                    It's money because the government SAYS it's money.

                    Instead of "gold", it could be "tin" or "lead" or "clam shells" or "shiny rocks", and the monetary system wouldn't change one iota.

                    It's ALL done by fiat.

                    (Oh, and before you give me the standard libertarian looniness about "the Fed is a private institution !!!", I will point out that the Fed chairman and its board of directors are appointed by the President and confirmed by the Senate.)

                    •  And that's the end (3+ / 0-)
                      Recommended by:
                      Dburn, side pocket, ozsea1
                      It's money because the government SAYS it's money.
                      No, they haven't. They specifically declared paper to be money. You already know that, and thus this discussion is over.

                      ¡Cállate o despertarás la izquierda! - protest sign in Spain

                      by gjohnsit on Sat Feb 09, 2013 at 07:31:16 AM PST

                      [ Parent ]

                    •  Cowry shells and glass beads. (1+ / 0-)
                      Recommended by:

                      All 'money' is, by definition, simply a medium of exchange. Valued at the printing end as X denomination, at the exchange end it's valued by what it can be used to purchase. What it can be used to purchase is subject to inflation and deflation based on surpluses and shortages. As well as by the needfulness of that which is exchanged.

                      You can get a fair feel for what's worth what by spending some time in a community barter system, which is straight goods/services exchanged directly for goods/services. Say, a haircut and facial from the local trained and experienced cosmetologist is worth a bushel of tomatoes or two bushels of corn, and a roof repair job from the local handyman is worth 7 home-cooked meals and two layer hens. Or...

                      I have some acreage, a large truck garden, fruit orchard, and forest grown medicinals. I can exchange raw (what I grow in exchange for what I don't grow) at the local tailgate market, and I produce some value-addeds (tinctures, teas, wine vinegars and balsamic, sun-dried produce, etc.). The processed goods are worth more than the raw goods because there's more time, effort and skill involved. Money is just a stand-in for goods/services. Until it becomes an end in itself - which is the state of our economy right now - so that non-producers have it all and producers have nothing.

                  •  You have no idea what you're talking about (0+ / 0-)

                    The question is: why is this relatively rare soft metal with few uses other than jewelry and adornment "real" money while paper or electronic money isn't? Why should gold have a value beyond it's use value as wedding rings and ghetto fabulous necklaces?

                    Gold bugs are inherently stupid people -- like flat earthers and creationists.

                    •  It's a shame our financial superstitions make gold (3+ / 0-)
                      Recommended by:
                      HamdenRice, codairem, NoMoreLies

                      so expensive, because it's actually very useful stuff. It does not oxidize, it conducts electricity, and it is a fantastic neutron absorber -- which is why gold is used to protect electronics in satellites and space probes.

                    •  Seems to be a lot of this going around (0+ / 0-)

                      in this diary.

                      Gold bugs are inherently stupid people
                       "Everyone who disagrees with me is stupid. Especially when I don't understand what the other person is saying."

                      ¡Cállate o despertarás la izquierda! - protest sign in Spain

                      by gjohnsit on Sat Feb 09, 2013 at 01:13:20 PM PST

                      [ Parent ]

                      •  No only gold buggers are stupid (1+ / 0-)
                        Recommended by:

                        not everyone who disagrees with me. But if you are a gold bugger, intellectually, you are at the same level as a flat earther, a creationist, a climate denier and others who simply haven't entered into the 20th century.

                        Does anyone need any more proof of the absolute stupidity of gold buggers than that their leader is Ron Paul?

                        •  Gold buggers (1+ / 0-)
                          Recommended by:

                          The return on my gold investments over the last decade is over 500%. (and no, I didn't own gold before that)

                           If that's your definition of "stupid" then please tell me who else you think is "stupid" and I'll gladly invest with them too.

                          ¡Cállate o despertarás la izquierda! - protest sign in Spain

                          by gjohnsit on Sat Feb 09, 2013 at 02:03:15 PM PST

                          [ Parent ]

                          •  The issue isn't this or that investment (0+ / 0-)

                            Gold buggery is the supremely idiotic idea that money should be backed by gold.

                            That means that gold -- a soft yellowish metal, the sum mass of which ever refined is about the size of a large suburban house or small office building -- should represent the value of all goods and services produced.

                            Gold buggers would have us shrink the global economy -- all the farm produce, wheat, corn, rice, barley, all the clothing, every new building, all computers, electronics, household appliances, all cars, trucks, buses, airplanes, trains, meals, all the hours worked by teachers, doctors, police officers, firemen, sanitation workers, writers, actors, hamburger slingers, etc, etc, -- to the use value of a block of soft yellow metal the size of a house.

                            All gold buggers are IDIOTS.  Complete and TOTAL MORONS.

                            Reducing the global economy of 7 billion people to the size of a block of soft yellow metal the size of a suburban house is IDIOTIC.  

                            Only stupid idiots are gold bugs.

                          •  This makes no sense (0+ / 0-)

                            The sum total of printed money wouldn't occupy more than a (larger) office block either.  Would you say that we have "reduc[ed] the global economy to the size of a block of printed paper the size of an office park"?  

                          •  If that is what gold bugs wanted (0+ / 0-)

                            then they would be pretty stupid.

                             Fortunately, that isn't what gold bugs want.

                            ¡Cállate o despertarás la izquierda! - protest sign in Spain

                            by gjohnsit on Sun Feb 10, 2013 at 05:17:36 AM PST

                            [ Parent ]

        •  Money is a social construct (3+ / 0-)
          Recommended by:
          ozsea1, shrike, NoMoreLies

          You are correct that gold is money only by definition, yet when you use the term "fiat money" your argument gets lost in technical money language.

          The bigger picture is that things have value based upon cultural proclivities, when white settlers overran the Black Hills looking for gold the Lakota called gold "the yellow metal that drives white men crazy." Gold had no intrinsic value to the Lakota, but the sacred mountains, as a source of food (hunting), timber (for shelter and heat in Winter), and the spiritual qualities they perceived, including the mountains used for vision quests, made the mountains themselves of far higher value in their culture.

          I appreciate your making the argument about gold being no more real than paper. As is often said, you can't eat gold.

          "Political ends as sad remains will die." - YES 'And You and I' ; -8.88, -9.54

          by US Blues on Sat Feb 09, 2013 at 08:11:26 AM PST

          [ Parent ]

      •  Money isn't gold, but (1+ / 0-)
        Recommended by:

        gold is money.
          anything a central bank holds in its vaults is money by definition. And central banks are buying gold by the hundreds of tonnes.

        ¡Cállate o despertarás la izquierda! - protest sign in Spain

        by gjohnsit on Sat Feb 09, 2013 at 05:49:25 AM PST

        [ Parent ]

        •  why is gold money, and not tin or clam shells (0+ / 0-)

          Answer: Because the government SAYS so.

          If you disagree, then please please please explain to us why "gold" is inherently "money", and clam shells are not. (And please account for the fact that clamshells WERE money in many cultures.)

          Stop getting your economic "information" from John Birch Society tracts.

    •  The fact that every radio show (2+ / 0-)
      Recommended by:
      ozsea1, grasshopper

      and 3am TV rerun of Laverne and Shirley is chock full of ads advising people to "buy gold now!" because of the impending inflationary crisis should be instructive to everyone. It's all a bunch of bullshit. The gold bug marketing machine makes money with gold at $1700 or gold at $400.

    •  Inflation has only been 3% (1+ / 0-)
      Recommended by:

      Yeah ex-energy, ex-food, ex-anything people need to live. The kicker of course is the "let them eat iPads" moment.   An administration officials was asked to come up with an inflation number that included the the things we need to live and work. Amazing enough the number worked out to the same ex-shit-we-need. People were amazed and some were in awe of the  amount of chutzpah that administration officials had when formulating the revised figure when they help up an iPad and used the 17% increase in processing power at the same price and expressed the 17% as a negative integer  to get the average inflation number of   "shit-we-need"  to come more or less close to the one that is published that is ex-shit-we-need number otherwise known as the CPI"

      Hence the reason it's  sometimes referred to  as the "let them eat iPads" inflation calculation.

      I think that was one of those turning moments, where the administration basically said " we will lie right in your faces with complete impunity because we know enough of our supporters accept everything we say as gospel."

      And why not since most of their supporters nodded in agreement since they had bought iPad 2 on the family plan.

      So it naturally followed that Most of the  supreme elitist financially illiterate  were only too happy to show their stupidity by breathlessness endorsing this bullshit at every opportunity.  Like right now.

  •  Partisans hate to talk about it (1+ / 0-)
    Recommended by:

    Except for a couple people who honestly believe that TARP was a good thing.

      The real problem is the news media, which has largely forgotten it.

    ¡Cállate o despertarás la izquierda! - protest sign in Spain

    by gjohnsit on Sat Feb 09, 2013 at 05:46:39 AM PST

    •  How is it that anyone can know (2+ / 0-)
      Recommended by:
      joe from Lowell, grasshopper

      for sure whether TARP was a good or bad thing? We were in crisis, and TARP was one of the remedies utilized to prevent a further collapse. But we did not experiment on a 2nd Earth with an alternative strategy, sans TARP, to see how that would go. Since we only have one course of history from which to judge our decisions, we simply cannot know whether this policy was a mistake or not. What we do know is that without some form of radical intervention we faced a potentially devastating collapse, much worse than what we actually experienced. It's shear arrogance (or ignorance) to declare TARP factually a mistake.

      •  Iceland nationalized their banks (3+ / 0-)
        Recommended by:
        ozsea1, Dburn, codairem

        and threw the bankers in jail.
           Their economy is recovering right now.

         History has shown that this is the right method.

        What we did is what Japan did back in the 1990's. It didn't work for them, and it isn't working for us.

        ¡Cállate o despertarás la izquierda! - protest sign in Spain

        by gjohnsit on Sat Feb 09, 2013 at 08:26:25 AM PST

        [ Parent ]

        •  Ah, we have someone here who (2+ / 0-)
          Recommended by:
          joe from Lowell, shrike

          thinks that the American and Icelandic economies are comparable. That explains a great deal.

          •  Not only that... (0+ / 0-)

            but what they described concerning Iceland is not exactly true.

            •  It's exactly true (0+ / 0-)

              The Icelandic banks were indeed nationalized and several bankers went to jail.
                That's what I said, and it is all backed up by facts.

              ¡Cállate o despertarás la izquierda! - protest sign in Spain

              by gjohnsit on Sat Feb 09, 2013 at 01:26:56 PM PST

              [ Parent ]

              •  No, it's not. (0+ / 0-)

                The banks are still private entities.  Trust me, Landsbankinn is my personal bank, I know what the heck I'm talking about.  And very few people of any relevance were actually jailed, and only for outright Enron-style stuff or tax evasion, same as happens in the US.

                •  Re: (0+ / 0-)

                  Glitnir was nationalized. The other ones, including Landsbankinn, went into recievership, which means investors lost their money.
                     That's far different from America, where we simply shoveled money at the banks.

                  And very few people of any relevance were actually jailed, and only for outright Enron-style stuff or tax evasion, same as happens in the US.
                   You mean what used to happen in the US.

                  ¡Cállate o despertarás la izquierda! - protest sign in Spain

                  by gjohnsit on Sun Feb 10, 2013 at 07:45:40 AM PST

                  [ Parent ]

                  •  Wrong once again. (0+ / 0-)

                    The Icelandic government owns only 5% of Glitnir.  It is a private bank.  By contrast, US taxpayers bought 26% of GM during that bailout.

                    Yes investors lost money.  The same as happened with, say, investors in Lehman Brothers.

                    You mean what used to happen in the US.
                    Um, hello, Enron?  Adelphia?  Tyco?  Worldcom?  AIG?  Bernie Madoff?  Have you not been paying attention?  The US government has done the exact same thing the Icelandic government has - prosecute cases of outright fraud.  It has not prosecuted the people who caused the mess in general, however.  And neither has Iceland.
          •  Someone misses the point (1+ / 0-)
            Recommended by:

            It doesn't matter the size of the economy, good policy is good policy.
              Your logic is like saying white collar crime can be punished in one country but not in another because the banks are differently sized.

            ¡Cállate o despertarás la izquierda! - protest sign in Spain

            by gjohnsit on Sat Feb 09, 2013 at 01:24:16 PM PST

            [ Parent ]

        •  Not only did Japan Bail out the Banks (2+ / 0-)
          Recommended by:
          gjohnsit, codairem

          But we  kept castigating Japan for not forcing it's banks to  come clean with the bad loans on Japan's books in the 90s, until of course we replicated the behavior ourselves in the 2000s and most likely used Japan's experience as a blue print to create the fiction called post crisis Bank financial statements and keep it going despite wave after wave of revulsion hit officials, then one day one day a Bank analyst on Wall Street cried out in pain and said " Will someone please give us a plug number for fraud so we can come up with accurate price targets for the common stock?"

          Amazingly enough, it still didn't occur to anyone that anything wrong was happening.

      •  This is the best comment (0+ / 0-)

        that you can make about it.


        The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

        by fladem on Sat Feb 09, 2013 at 12:10:29 PM PST

        [ Parent ]

  •  Here's what I don't get. (3+ / 0-)
    Recommended by:
    ybruti, joe from Lowell, shrike

    If financial collapse was the problem, why rail against TARP?  Does anyone outside the inner circles know how close we were to collapse?  Do we assume it was a lie because of paranoia, are there facts that support either argument?  

    IIRC the Bush TARP was revised by Geithner, and the auto bailout added to the package.  I also read that those changes resulted in a relatively quick payback, meaning taxpayers were not on the hook for hundreds of billions.  Does it matter that the paid back dollars were worth less?  Isn't the dollar worth less because of inflation, regardless of TARP?  IRL, food costs 3 times what it did 5 years ago.  My dollar doesn't go very far as a result.

    I get it that the whole system is a scam that benefits the wealthy, but it also benefits us when properly regulated.  What are the alternatives?  Are they workable?  

    Has anyone considered just ignoring corporations and building a small business economy?  Didn't Obama get slammed for creating a different way to capitalize small businesses?  
    How effective is it to switch to local banks or credit unions?  

    We have a thriving economy in my town, based on small businesses.  No big box stores.  If no one drove 20 miles to Home Depot our hardware store would be expanding even more.  

    I'd like some practical suggestions on how to disconnect from a system that harms us, or an admission that it's a bad system, here's how to improve it.  I'd like to know that 0% of progressives shop at WalMart or Sam's Club, that there's an active movement to start and support small businesses.

    I'm not looking for a love that will lift me up and carry me away. A love that will stroll alongside and make a few amusing comments will suffice.

    by I love OCD on Sat Feb 09, 2013 at 06:57:27 AM PST

  •  Obama supported TARP and that's good enough (0+ / 0-)

    For me.  TARP was a great thing.

  •  TARP made billions for the federal government (5+ / 0-)
    Recommended by:
    doc2, joe from Lowell, FG, shrike, grasshopper

    and saved the world at the same time. Only idiots are against TARP.

    I read all 100 pages of the bill and all 100 pages of the terms of the preferred stock that banks were forced to sell.

    TARP was a huge success and hugely profitable to the government because after Hank Paulson asked for a blank check, the bill was written by uber liberal Barney Frank.

    TARP provided for a mandatory 5% dividend to the stockholder (the federal government) plus warrants on the banks' stock to recapture almost 100% of the value of the banks' recovery.

    As I said, only ill informed people think TARP was a bad thing. It saved the world and earned the government tens of billions in profits.

    •  So I guess you didn't read the post (4+ / 0-)
      Recommended by:
      Rizzo, lotlizard, ozsea1, codairem

      You're using the precise argument that I noted was not rigorous or convincing ("The key in this formulation is to look at TARP in isolation, and to only account for the dollars sent out and repaid.") You don't address the government guarantee point, nor do you address the problematic nature of the repayments, nor do you address the moral hazard point, nor do you address the more thorough takedowns I link to.  Perhaps the "only idiots" comment is projection.

      •  There is so much factually wrong in diary (1+ / 0-)
        Recommended by:

        that it would be pointless to go through it. I would be like picking gnat shit out of pepper where half the "pepper" was gnat shit.

        Sorry, but your diary is a massive factual fail. Debunking it would be like a geologist arguing with someone who thinks the world was created 5,000 years ago.

      •  I'll tell you exactly where I quit reading. (1+ / 0-)
        Recommended by:

        It was here.

        Everyone hated TARP.  It was not left versus right, but outsider versus establishment.  Democrats and Republicans in the capitol supported it.  DC-based reporters and analysts assured audiences that it was distasteful but necessary.  (This was typically accompanied with a false choice of doing nothing or letting civilization collapse.)  All the players inside the Beltway were heavily invested in it, but outside the hothouse it was loathed and reviled.  It was unpopular across the political spectrum.  On what other issue has that been true?
        Anything beyond that point was based on a false premise, so no reason to continue.
    •  The TARP bailout saved the TBTF banks (4+ / 0-)
      Recommended by:
      Rizzo, lotlizard, US Blues, codairem

      and made them all bigger. Thus they are now Too-Big-To-Jail, and above the law.

        But I'm just an idiot because I opposed this.

      ¡Cállate o despertarás la izquierda! - protest sign in Spain

      by gjohnsit on Sat Feb 09, 2013 at 07:37:02 AM PST

      [ Parent ]

      •  Wrong. Factually inaccurate. (2+ / 0-)
        Recommended by:
        joe from Lowell, shrike

        TARP also saved hundreds of small community based credit unions and community banks.

        Maybe you should actually look at the factual material published about it.

        •  On the contrary (2+ / 0-)
          Recommended by:
          ozsea1, codairem

          I've read plenty of documentation.
          The overwhelming majority of TARP went to Wall Street. It's obviously you who hasn't researched this properly.

          ¡Cállate o despertarás la izquierda! - protest sign in Spain

          by gjohnsit on Sat Feb 09, 2013 at 08:28:18 AM PST

          [ Parent ]

          •  Do you even know what Wall Street is??? (1+ / 0-)
            Recommended by:
            joe from Lowell

            The term "Wall Street" refers to investment banks, brokerages and the stock exchanges, and the law firms, accounting firms, printers and other companies that service them.

            Historically, "Wall Street" does not refer to commercial banks like Bank of America, Citibank or Chase who received a substantial amount of the initial TARP funds on rather harsh terms.

            What Wall Street firm received TARP money, pray tell, and to what extent was it overwhelmingly more than was received by the commercial banks?

            Then pray tell, how much went to regional and local banks?

            I will truly enjoy your efforts to answer these questions, but somehow I'm just guessing you won't even try.

            •  Re: (0+ / 0-)

              First of all, the term "Wall Street" has always referred to bankers. Going all the way back to JP Morgan.

                That you think you can bluff your way past this little item shows that you have an agenda that is more important than being honest.

                That you think the bankers got their TARP funds at "rather harsh terms" is laughable. It also shows where your values (i.e. pocketbook) lie.

              ¡Cállate o despertarás la izquierda! - protest sign in Spain

              by gjohnsit on Sat Feb 09, 2013 at 01:18:47 PM PST

              [ Parent ]

              •  Wall Street has always referred to Wall Street (0+ / 0-)

                not to regional banks, not to credit unions, not even to commercial banks. It refers to the actual street in lower Manhattan, which is the headquarters for a particular kind of bank -- investment banks -- and the companies that service them and the stock exchanges.

        •  People misunderstand what Too Big To Fail means. (2+ / 0-)
          Recommended by:
          shrike, HamdenRice

          Many people seem to think that it's a political statement - these banks are so rich and politically-connected that the government wouldn't let them fail.  This misses the point.

          The big banks were TBTF because their failure would have dragged down the entire rest of the banking sector, the financial sector, and therefore the economy as a whole with them.

          If we'd let these banks go under, it would have been 1929 again.  We would have had bank runs, meaning banks all over the country would have gone under - but not before calling in all their loans, driving many thousands of businesses into bankruptcy, too.  The author talks about the peripheral consequences of TARP - those other than the bottom line to the taxpayers.  OK, while we're doing that, let's also factor in the banks runs avoided.

          Art is the handmaid of human good.

          by joe from Lowell on Sat Feb 09, 2013 at 11:33:56 AM PST

          [ Parent ]

          •  Precisely why the system should not be private (1+ / 0-)
            Recommended by:

            To have such a system of symbol manipulation (and that is all it is) in private hands, i.e. not democratically accountable, and to have the survival of the entire society depend on their good behavior is absurd. The financial system should be a function of government, its policies decided by public debate, its malfeasances entire accountable to the people.

            •  It's worked for hundreds of years. (0+ / 0-)

              A closely-regulated private banking system has been shown to be quite robust.  I see the problem as a lack of oversight, not as something that needs to be government-run.

              I'd worry, in a purely government system, about the monopoly power being a source of instability.

              Art is the handmaid of human good.

              by joe from Lowell on Sun Feb 10, 2013 at 10:42:26 AM PST

              [ Parent ]

          •  What will be the excuse (1+ / 0-)
            Recommended by:

            the next time the bankers fail? How much will they be able to steal the next time?

            after all, they are even bigger now.

            ¡Cállate o despertarás la izquierda! - protest sign in Spain

            by gjohnsit on Sat Feb 09, 2013 at 01:20:12 PM PST

            [ Parent ]

    •  that's your assessment of success? (0+ / 0-)

      the fucking feds made a goddamned profit on it at the end of the day?

      Don't call me an idiot...and I won't call you something worse.

      Who knows what else could have been done had that amount of money been spent differently?  We'll never know...and some, like you, probably don't care.

      Oregon:'s cold. But it's a damp cold.

      by Keith930 on Sat Feb 09, 2013 at 02:33:47 PM PST

      [ Parent ]

      •  The money wasn't spent; it was lent. (0+ / 0-)
        Who knows what else could have been done had that amount of money been spent differently?
        Because it was paid back with great profit we don't have to guess what else could have been done with it, because the federal government can in fact do things with that money.
  •  Matt Taibi (2+ / 0-)
    Recommended by:
    ozsea1, codairem

    "The holy grail of progressive activists should be breaking up the to big to fail banks"

    Which were of course made bigger and even more entrenched by TARP

  •  They remember the bribes VERY CLEARLY (2+ / 0-)
    Recommended by:
    US Blues, ozsea1

    Politicians in the USA remember the bribes that elect them and supply them with massive wealth after they can no longer efficiently betray the people for the benefit of their slave masters. The slave masters keep the money flow going to impress a new generation of traitorous politicians. Recently the Republicans have needed more bribes to get elected and have been slightly more servile. The elephant symbol is perfect because the Republicans remember longer the taste of their master's butt and crave the taste fresh every morning.

  •  TARP Was Never Really Scrutinized in the Media (3+ / 0-)
    Recommended by:
    US Blues, ozsea1, Dburn

    Precisely because our courtier-journalists knew that government had delivered an extraordinary benefit to our political and economics elites that would not hold up under examination.

    And it's really left out the conversation for this reason.

    The only thing you hear about the bailout now is "The banks paid it all back and the government made a profit."

    "I'll believe that corporations are people when I see Rick Perry execute one."

    by bink on Sat Feb 09, 2013 at 08:04:21 AM PST

    •  Pay Back -only if you don't look too close (2+ / 0-)
      Recommended by:
      codairem, bink

      Since the money couldn't possibly come from equity since they didn't have any, it had to come from  "reserves" created by the fed or otherwise known as printed money. There is a reason why the bail-out costs were pinned in 2009 at 23 trillion dollars. Obviously that number was based only on the facts known at the time. But as billions and billions of dollars are awarded in judgement after judgement against the banks as one agreement after another is executed, one has to wonder where will all this money come from.

      It was a three card Monte that evolved to a five card Monte and is still being played vigorously today.

      That also means Bernanke will keep buying 85 Billion in MBS each month until ...somehow it gets past 23 trillion. Which is one of the many ways TARP got paid somewhere in the myriad of alphabet programs that came after TARP once politicians realized that it was no longer politically tenable to directly infuse the banks with money.

      It really is depressing too. The administration and congress along with their overseers were helped enormously not only by the complexity, breadth and depth of the heist which resulted in the apologists keeping the ignorant focused on TARP as the one and only component of the bank- heist which of course , wasn't a heist, if one is to believe that the money paid back actually came from organic earnings or equity injections by the banks.

      I'm sure the Govt books will show that most of TARP was repaid. That's why the bail-out continued under the watchful and completely opaque oversight of the FED.

      Historians will look back on this as the greatest con in the history of govt that was covered up by a tiny bit of the over-all heist in a program called TARP. To all the apologists out there, I truly hope that when your assets become worthless and you are no longer employed you will feel what 10s of millions have felt and continue to feel everyday as they struggle for ways to keep food on the table.

  •  What we don't learn we're doomed to repeat (3+ / 0-)
    Recommended by:
    ozsea1, Dburn, ybruti

    TARP itself wasn't bad policy.  Under the circumstances it was the only rational course of action.

    However, it should have come with big, big conditions.  Conditions such as, major banks de-merging, a full restoration of Glass-Steagall, and other reforms and re-regulations to make sure the 2007-08 crisis never happened again.

    What happened, through Dodd-Frank and other changes in oversight was merely a tiny fraction of what needed to happen.  And official Washington seems to have forgotten it was even a problem.

    Absent major steps towards renewing Glass-Steagall, I give it ten years at most before another crisis, only this time there's no possibility of a happy ending because government won't be able to roll out a TARP to prevent an immediate crisis and won't have the resources to deal with the long-term after effects.  And all because the mantra of the day seems to be making sure bankers are free to bank.  Personally I'd substitute a "w" for the "b".  It would describe their productivity more honestly.

  •  The illusion of "democracy" in the US..... (2+ / 0-)
    Recommended by:
    ozsea1, codairem made possible through limited selectivity.

    At the topmost level, some law-breakers are selected for vigorous criminal prosecution (eg, whistle-blowers). Meanwhile, very few banksters have been held accountable for the multi-trillion dollar fraud which led to the Great Recession. Even though who have been "punished" are usually subject to token civil fines amounting to just a few percent of the "profits" they accrued. The vast majority of Wall Street insiders selected for criminal prosecution are those who've stolen their profits from other 1%ers (eg: Madoff).

    In the Traditional Media, only those facts which are in agreement with the conventional narrative are selected for publication, while facts that falsify the conventional narrative are unreported. For example, the Scandinavian social democracies are examples of how high levels of union participation, government regulation and taxation produce prosperous societies. But the conventional narrative that has been selected by the Traditional Media is the one which asserts that prosperity can only be achieved through reduced unionization, deregulation and low taxation.

    And then finally, the American people are given a very limited selection of governing philosophies: from the Center-Right, DLC/New Democrat philosophies of Bill Clinton and Barack Obama to the Far-Right mis-governing philosophies of Dick Cheney and George W Bush. It is only through the selective reporting of the Traditional Media, that Clinton and Obama can be presented as Left or Center-Left leaders.

    In the Fox News Christian Nation, public schools won't teach sex education and evolution; instead they'll have an NRA sponsored Shots for Tots: Gunz in Schoolz program.

    by xynz on Sat Feb 09, 2013 at 11:11:42 AM PST

  •  The usual Wall St fluffers, apologists, trolls (2+ / 0-)
    Recommended by:
    danps, gjohnsit

    and syncophants showed up in force, so your diary must've been uncomfortable for the Comfortable Class.

    Tipped and recced, accordingly.

    The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

    by ozsea1 on Sat Feb 09, 2013 at 11:22:30 AM PST

  •  TARP worked. No banks runs, saved auto industry. (1+ / 0-)
    Recommended by:

    And whether you like to hear it or not, the money was paid back.

    It's very dishonest of this diarist to complain about people noting that the money was paid back, after years and years of TARP critics themselves citing the cost to the taxpayer as their core argument against it.

    Apparently, the bottom line for the taxpayer was incredibly important right up until the number turned from red to black, at which point the issue they they, themselves, keep shouting about became verboten.

    The point about keeping the dirty-hands executives in place is a legitimate one, but that issue is dealt with in the resolution authority in Dodd-Frank.  A structurallyo-important bank needs to fire its senior management before getting help from the government now.

    Art is the handmaid of human good.

    by joe from Lowell on Sat Feb 09, 2013 at 11:28:19 AM PST

  •  I saw Too Big to Fail night before last. (2+ / 0-)
    Recommended by:
    Dburn, gjohnsit

    It left me angry because of the things left unsaid.

    There is certainly room for giving what happened in THE FILM (not true events) a more skeptical spin, but the overall message of the film was that the big smart guys had no choices and did the best they could under the circumstances.

    And I think that's self-serving bullshit.  I'm like the guy watching the Three Card Monte game who can't say for sure where the fucking Queen went, so, yes, I guess I have no real say in this.  I'm sure if I cornered Tim Geithner at a party and told him to a face he was part of a screw job, he'd just roll his eyes and go, "Oh, people like you just don't get it and never will."  

    So, yup, maybe we just don't get it.  Maybe if we all had MacArthur's pistol framed on our wall (like Paulson in the film), we'd be able to understand that that's just the way the system always works.

    But I'm bothered that nobody's head ever rolled.  Nobody was ever fired in disgrace.  "Oh, whoever they fired would be a scapegoat," Tim Geithner would say.  Well fucking fine, then!  Give us a fucking scapegoat, PLEASE!  Wouldn't we all love it if there were at least one or two people forced to walk out of a government office with their shoulder hunched, going off to write a Tell All book about what really happened that spreads the game, and then to hit the talk show circuit and name names?

    But that never seems to happen, not just with the 2008 collapse, but with ANYTHING.  Nobody walked the plank on torture.  Nobody walked the plank on 9/11.  Poor Brownie, well, I guess he walked the plank for Katrina, so my hat is slightly tipped to Bush for at least that token gesture.  It was nice seeing Brownie on Olbermann defending himself; maybe that's why Washington has learned not to even make that kind of petty token gesture of repentance.

    Things are decided in secret and then we find out later and our outrage is supposed to be tempered by the fact that circumstances were tough for the poor guys at the top having to make the "tough decisions," no matter how vile or criminal or venal they may be.

  •  The focus on TARP as good or bad (1+ / 0-)
    Recommended by:

    ...probably misses the point. At the time the credit markets were seriously impaired. There is a unbelievably large amount of money that is loaned back and forth between banks, money market funds, funds of all kinds and businesses. That market froze and without the grease that is the short term lending system an awful lot of paychecks would have been worthless. The government jumped in with a truckload of grease in the form of TARP and it worked. We became the lender for the short term market and it saved the economy from a nightmare.

    I think what most people who demonize TARP are really angry about it that we the people, represented by government, were not allowed to use our power to extract some justice from those we perceived as causing all this grief. Our representatives did not bargain for the help but sent out the money with very little in the way of demands.

    But was it realistic to think we could demand the princes of finance give up their power? Not likely. They made it pretty clear they were willing to let the whole thing go to hell if the intervention in any way threatened them. I have no doubt they would have.

    Now it's a different story though. It would be messy and disruptive, but not to even investigate fraud at the highest levels is the really shameful part of this whole tragedy.

    Growth for the sake of growth is the ideology of the cancer cell. --Edward Abbey

    by ricklewsive on Sat Feb 09, 2013 at 02:16:54 PM PST

  •  Political contributions by bailed out bankers, (0+ / 0-)

    which should have been feasible to restrict in connection with the bail-outs,

    may be a key root cause of major post-TARP problems such as:

    1. TBTF banks not being separated into smaller banks,

    2. lack of force and teeth in attempts to re-separate deposit-taking from high-risk activities,

    3. lack of  prosecution of fraud by major financial institutions,

    4. banks retaining their role as conduit for (with no obligation to pass through) the Fed's attempts to stimulate lending.

    Support filibuster reform by adding $0.51 to all contributions!

    by emorej a Hong Kong on Sat Feb 09, 2013 at 05:51:40 PM PST

  •  Next Time Its Going to Be Interesting (0+ / 0-)

    When a crisis occurs, how the government reacts depends on what lessons were learned from the last crisis. The government bailed out the banks during the financial panic of 2008  because the last lesson learned was that the collapse of the banking system caused a recession to turn into the Great Depression. I fear that the lesson from the last financial panic is that bailouts only help the fat cats. Thus, when the next financial panic occurs, the government will do what they did in 1929 and let the banking system and auto industry collapse.

    Ideally, the government should have made the bailouts contingent on greater regulation of the banking industry. Unfortunately, this did not happen because the politicians in October of 2008 were in such a panic and hurry that they did not think about it. However, had we allowed the investment banks to collapse along with the auto industry, we would now be experiencing a Great Depression. When Congress first rejected TARP, the stock market crashed. In the first 10 days of October 2008, the Dow collapsed by 22% approximately the same dive experienced during the October stock market crash of 1929 and Black Monday in October 19, 1987.

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