From the fall of 2008 through the spring of 2009 the federal government’s Troubled Asset Relief Program – or TARP – was branded ‘BAILOUT’ and beat mercilessly by the right, the left and the well-meaning but barely informed.
This very site lauded and at times railed against the $700 billion fund that saved the U.S. financial services industry and then the domestic auto business. In a near-final analysis, I’m reminded of the conversation that every parent has had with every child:
Little Johnny, lip curled, tears streaming down face: “That’s not fair!”
Mom, literally at her wit’s end: “Life – isn’t fair.”
Oh, in the Insta-World to pause and look back. I think in the early and mid 20th century they called it, reflection.
On the treadmill today, three bits of news had me pause for reflection about the bailout and the whole sordid economic and political affair surrounding it. First, the bits of news.
U.S. Treasury Secretary Tim Geithner testified on foreclosure prevention and other bailout matters on Thursday before the Congressional Oversight Panel. This panel was created when TARP was enacted by Congress and tracks and analyzes TARP. Geithner told the panel that he disagrees with the latest Congressional Budget Office estimate that TARP will end up costing U.S. taxpayers $25 billion:
The Congressional Budget Office has estimated that taxpayers will lose $25 billion on the rescue of banks, other financial institutions and automakers that came in at the peak of the crisis in the fall of 2008.
Mr. Geithner told a hearing by a Congressionally appointed panel that it would cost less than that. “Those estimates are now around $25 billion,” Mr. Geithner said. “They are too high, in my judgment. Ultimately, they’ll be lower.”
Mr. Geithner did not provide another estimate.
Measured in cost, he said, the bailout “will rank as one of the most effective crisis-response programs ever implemented.” (Source)
Another story in Friday’s New York Times reported on two reports out of Europe detailing how Old World banks have to go to meet G20 agreed upon capital requirements. Suffice to say, our European cousins are behind the effort to shore up big banks’ balance sheets.