4 ms·

This is a pretty poor comparison. You'd do better to cite a Congressional action that turned out to be a bad idea, like the Iraq War. When you cite TARP you're

This is a pretty poor comparison. You'd do better to cite a Congressional action that turned out to be a bad idea, like the Iraq War. When you cite TARP you're actually saying "the public is dumb and doesn't understand economics," which is a pretty accurate assessment, but not the one you were trying to make. TARP probably saved us from a Great Depression, and IIRC the bailouts are in the black except for the segments bailing out the government mortgage banks and the car companies. FTR, the protests against Volcker's anti-inflation measures in the 70s were bigger, with farmers eventually blockading the Fed headquarters with their tractors. The protestors were wrong then, too.

jrockway 17y ago
Indeed. The banks paid TARP back very quickly. I imagined it was going to be something that would take place over 30 or 50 years, but it happened in a matter of weeks. Not a bad investment on the government's part -- they might have even made some money!
- chaostheory 17y ago
  > Indeed. The banks paid TARP back very quickly Not quite: http://www.zerohedge.com/article/10-ways-say-no-banks-have-not-paid-back-their-debt-taxpayer http://www.zerohedge.com/article/10-ways-say-no-banks-have-n...
  - jrockway 17y ago
    I think this misses a lot of points. For every person that lost money in savings accounts and smart investments (me), there is another person that got to buy their home with 4% financing instead of the 8 or 10%. So if your article wants to count losses from low interest rates, it should also offset them against gains from cheap loans. (Also, TARP probably didn't have much to do with this. It just meant that the name on your bank account stayed "Bank of America" instead of "Bank of the United States of America".)
drunkpotato 17y ago
It's a bit too soon to be saying TARP was a good piece of legislation. It's also a bit of fantasy to say what would have happened if TARP hadn't passed. The thing is, TARP hasn't led to any reforms in the financial sector. It simply shoveled taxpayer money at private corporations with very few strings attached, which propped up the banks long enough to say "hey, thanks, we would have been fine anyway, really, now piss off". I think we'd be a lot better off without TARP. Your smug "the protestors were wrong" is unjustified.
- cynicalkane 17y ago
  The Great Depression was not caused by a sudden catastrophe but rather a crawling plague of failures that was reinforced every time the snooty holier-than-thou politicians living in Congress and the Fed refused to lend a hand to banks, even ramping up regulatory requirements in mid-crisis. Nobody knows what would have happened for the current crisis, but history suggests attitudes like yours are not a good idea. The last thing we need right now is a nation of Hoovers.
  - jswinghammer 17y ago
    I agree that we don't need any more Hoovers but that's all we have. If you read about the scope of Hoover's interventions into the American economy in 1929 after the crash until he left office you wouldn't suggest that he left the economy alone or did too little.
  - anamax 17y ago
    > The last thing we need right now is a nation of Hoovers. I suggest that you re-read your history. Hoover was a progressive and was ramping up deficit spending and production controls. FDR ran against those policies but did a 180 when he got into office and basically just did more of the same. That war on production is what made the great depression great. It didn't really end until WWII made it untenable - you can't have an empty arsenal of democracy.
anamax 17y ago
> TARP probably saved us from a Great Depression, Oh really? How did forcing "loans" on Wells Fargo and other banks that didn't need money save us from anything? Note that as the money is repaid, it's being spent on pork under the "hey look, we didn't expect that" theory. > the bailouts are in the black except for the segments bailing out the government mortgage banks The payments to Goldman via AIG? Note that Fannie and Freddie are continuing to lose money in a desperate attempt to delay additional housing market loses until after the election.
- jeromec 17y ago
  > Oh really? How did forcing "loans" on Wells Fargo and other banks that didn't need money save us from anything? Part of the force in economics is psychology. If enough people think the dollar will crash then it will become a self-fulfilling prophecy. I don't know if you were paying attention when, after Congress first rejected TARP, the stock market shot down severely again. There are many people out there that believe the dollar will crash - something Ron Paul has warned for a long time, long before our current economic crisis (a big reason for his sudden popularity). Many people still believe it's not a question of if but when. The scary thing is just how much everything flipped upside down, and Dr. Paul went from "kook" to genius, while at the same time Warren Buffet tells us he also noticed the shift, while attending a birthday party of well-to-do friends, where many started asking if their money-market investments were safe: "When people who drive Rolls-Royces are worrying about their piggy banks, you know you've got a problem" - Warren Buffet (http://online.wsj.com/article/SB126056572135687829.html http://online.wsj.com/article/SB126056572135687829.html)
  - jeromec 17y ago
    The WSJ link above now has a paywall up. Try Google cache :) http://74.125.155.132/search?q=cache:oPdlnnlrFTkJ:online.wsj.com/article/SB126056572135687829.html+warren+buffet+when+start+piggy+banks+abyss&cd=1&hl=en&ct=clnk&gl=us http://74.125.155.132/search?q=cache:oPdlnnlrFTkJ:online.wsj...
  - anamax 17y ago
    > I don't know if you were paying attention when, after Congress first rejected TARP, the stock market shot down severely again. The stock market isn't the economy. Its moves now are somewhat independent of "life on the street". (That was even more true during the great depression.) > There are many people out there that believe the dollar will crash The dollar has weak for almost 10 years. It didn't and hasn't moved much.

jrockway 17y ago

Indeed. The banks paid TARP back very quickly. I imagined it was going to be something that would take place over 30 or 50 years, but it happened in a matter of weeks. Not a bad investment on the government's part -- they might have even made some money!

chaostheory 17y ago
> Indeed. The banks paid TARP back very quickly Not quite: http://www.zerohedge.com/article/10-ways-say-no-banks-have-not-paid-back-their-debt-taxpayer http://www.zerohedge.com/article/10-ways-say-no-banks-have-n...
- jrockway 17y ago
  I think this misses a lot of points. For every person that lost money in savings accounts and smart investments (me), there is another person that got to buy their home with 4% financing instead of the 8 or 10%. So if your article wants to count losses from low interest rates, it should also offset them against gains from cheap loans. (Also, TARP probably didn't have much to do with this. It just meant that the name on your bank account stayed "Bank of America" instead of "Bank of the United States of America".)

drunkpotato 17y ago

It's a bit too soon to be saying TARP was a good piece of legislation. It's also a bit of fantasy to say what would have happened if TARP hadn't passed. The thing is, TARP hasn't led to any reforms in the financial sector. It simply shoveled taxpayer money at private corporations with very few strings attached, which propped up the banks long enough to say "hey, thanks, we would have been fine anyway, really, now piss off". I think we'd be a lot better off without TARP. Your smug "the protestors were wrong" is unjustified.

cynicalkane 17y ago
The Great Depression was not caused by a sudden catastrophe but rather a crawling plague of failures that was reinforced every time the snooty holier-than-thou politicians living in Congress and the Fed refused to lend a hand to banks, even ramping up regulatory requirements in mid-crisis. Nobody knows what would have happened for the current crisis, but history suggests attitudes like yours are not a good idea. The last thing we need right now is a nation of Hoovers.
- jswinghammer 17y ago
  I agree that we don't need any more Hoovers but that's all we have. If you read about the scope of Hoover's interventions into the American economy in 1929 after the crash until he left office you wouldn't suggest that he left the economy alone or did too little.
- anamax 17y ago
  > The last thing we need right now is a nation of Hoovers. I suggest that you re-read your history. Hoover was a progressive and was ramping up deficit spending and production controls. FDR ran against those policies but did a 180 when he got into office and basically just did more of the same. That war on production is what made the great depression great. It didn't really end until WWII made it untenable - you can't have an empty arsenal of democracy.

anamax 17y ago

> TARP probably saved us from a Great Depression, Oh really? How did forcing "loans" on Wells Fargo and other banks that didn't need money save us from anything? Note that as the money is repaid, it's being spent on pork under the "hey look, we didn't expect that" theory. > the bailouts are in the black except for the segments bailing out the government mortgage banks The payments to Goldman via AIG? Note that Fannie and Freddie are continuing to lose money in a desperate attempt to delay additional housing market loses until after the election.

jeromec 17y ago
> Oh really? How did forcing "loans" on Wells Fargo and other banks that didn't need money save us from anything? Part of the force in economics is psychology. If enough people think the dollar will crash then it will become a self-fulfilling prophecy. I don't know if you were paying attention when, after Congress first rejected TARP, the stock market shot down severely again. There are many people out there that believe the dollar will crash - something Ron Paul has warned for a long time, long before our current economic crisis (a big reason for his sudden popularity). Many people still believe it's not a question of if but when. The scary thing is just how much everything flipped upside down, and Dr. Paul went from "kook" to genius, while at the same time Warren Buffet tells us he also noticed the shift, while attending a birthday party of well-to-do friends, where many started asking if their money-market investments were safe: "When people who drive Rolls-Royces are worrying about their piggy banks, you know you've got a problem" - Warren Buffet (http://online.wsj.com/article/SB126056572135687829.html http://online.wsj.com/article/SB126056572135687829.html)
- jeromec 17y ago
  The WSJ link above now has a paywall up. Try Google cache :) http://74.125.155.132/search?q=cache:oPdlnnlrFTkJ:online.wsj.com/article/SB126056572135687829.html+warren+buffet+when+start+piggy+banks+abyss&cd=1&hl=en&ct=clnk&gl=us http://74.125.155.132/search?q=cache:oPdlnnlrFTkJ:online.wsj...
- anamax 17y ago
  > I don't know if you were paying attention when, after Congress first rejected TARP, the stock market shot down severely again. The stock market isn't the economy. Its moves now are somewhat independent of "life on the street". (That was even more true during the great depression.) > There are many people out there that believe the dollar will crash The dollar has weak for almost 10 years. It didn't and hasn't moved much.