It's a TARP

[bushwacked]

http://seattletimes.nwsource.com/html/nati...bailouts01.html

[Ursa Majoris]

A quote from the article:

 

In a Newsweek poll last fall, 63 percent of respondents said the government's actions to rescue the banking and financial system were bad for the country.

 

But some of that anger appears to be fueled by misconception, Kaufman said. He cited a Bloomberg poll last fall in which 60 percent of respondents said they believed most of the TARP money would not be recovered.

 

A good chunk never was spent — $410 billion, or less than 60 percent, was distributed. And, because the program formally ended last year and only existing initiatives can continue to be funded, no more than $475 billion will be spent.

 

Massad said Treasury officials understand why the program has been so reviled, but added the public should focus on the bottom line.

 

"We did what we had to do, it worked better than people thought, and it's been far cheaper than people thought it would be."

[Perchoutofwater]

I'm glad that it looks like we will get most of our money back. I'm still very conflicted about TARP. It probably was the right thing to do in order to keep the economy completely out of the toilet, but at the same time as the article says I view it as an over-reach and a bad precedent. It appears as though Fannie and Freddie will be the biggest losers for us, which is not a surprise as IMO they are what started the ball rolling to begin with. If Obama can shut down or completely severe all ties between the government and Fannie and Freddie, that might just be the best thing he does as president.

[Ursa Majoris]

It probably was the right thing to do in order to keep the economy completely out of the toilet, but at the same time as the article says I view it as an over-reach and a bad precedent.

Although the fallout has not been anywhere near as bad as predicted, plus the fact that TARP has worked extremely well, I hope it is a one-time thing. The soft landing for all of us will, IMO, obscure the reality of what really needs to be done in terms of regulation and even breaking up the firms most heavily involved. This will allow the business apologists and their political cronies to fend off real reform, making it almost certain we will see a repeat and it won't be long coming.

[Perchoutofwater]

Although the fallout has not been anywhere near as bad as predicted, plus the fact that TARP has worked extremely well, I hope it is a one-time thing. The soft landing for all of us will, IMO, obscure the reality of what really needs to be done in terms of regulation and even breaking up the firms most heavily involved. This will allow the business apologists and their political cronies to fend off real reform, making it almost certain we will see a repeat and it won't be long coming.

 

I agree with you to an extent. I do think that there are some things that need to be changed via regulation, that may not have the support they would have had, had we really bottomed out. I also fear that actions like this are similar to welfare, and help breed irresponsibility. The problem you have when your safety net is too good, is you really aren't afraid to fall, so you take more risks or make more irrational decisions. From this standpoint large corporations are really no different than the career welfare recipient, or some that have been on unemployment for way too long. Rewarding irresponsible behavior only promotes more of the same. That is why I almost wish we would have taken our medicine, even though the short term impact would have been very negative. I would have almost rather seen those institutions dissolved and the government take care of those with funds in those institutions through the FDIC, then sell the assets and distribute whatever is left to the stockholders based on their percentage of overall holdings. It probably would have been more expensive, and it probably would have really hurt the economy short term, but it would have also probably prevented anything like this from ever happening again, for two reasons. The first reason is the one you gave, the public backlash would be so severe that there would be the political capital to change the regulations (though I fear some might go to far with this). The second would be the investors would be much more diligent in the future when they try to determine what they are going to invest in. Companies would know this, and would have to do more to self regulate if they are ever to raise additional capital.