Neil Barofsky, the Special Inspector General in Charge of oversight for the bailouts, essentially a government watchdog, is releasing a report today in which he gives a blunt assessment for the TARP bailouts started under Bush and expanded by Obama: The Bailouts saved our economy, but cost us more in the long term.
TIME:
[Barofsky] said the $700 billion bailout for the financial industry played a major role in rescuing the economy over the last year but also engendered anger and distrust among Americans because of secrecy and confusion about the way the program was handled...
"Despite the aspects of TARP that could reasonably be viewed as a substantial success," he wrote, "Treasury's actions in this regard have contributed to damage the credibility of the program and of the government itself, and the anger, cynicism and distrust created must be chalked up as one of the substantial, albeit unnecessary, costs of TARP."
Barofsky said public suspicion was fed by Treasury's decision not to require banks to report how they used their rescue money and its "less-than-accurate" statements describing the financial condition of nine large banks that benefited from large infusions of aid...
Overall, Barofsky said the cost of preventing a financial collapse fell into three categories:
•Taxpayers: The government has spent more than $454 billion through TARP programs. Forty-seven TARP recipients have paid back nearly $73 billion. That means more than $317 billion remains available. The program is set to end Dec. 31, but the administration could seek an extension until next October. Despite the repayments several of the program are not expected to yield returns to the taxpayer, including a $50 billion mortgage modification plan and some of the money injected into auto companies.
•The integrity of the industry: Many firms considered "too big to fail" last year, and thus in need of government assistance, are even bigger now. "Absent meaningful regulatory reform, TARP runs the risk of merely reanimating markets that had collapsed under the weight of reckless behavior," the report sates.
•The credibility of the government: Barofsky wrote that public antipathy for the bailout is fueled by "the lack of transparency in the program." Over the course of the year, Barofsky has called on the Treasury Department to seek more information from banks on how they use their taxpayer assistance.
---------------------------------------------
Basically, the bailouts worked in the short term. But because of government ineptitude and all the secrecy, distrust has been seeded instead of consumer confidence, which is what was really needed for the market to correct itself. A full disclosure and better oversight in the bailouts would've helped, but both Bush and Obama almost gave the money away without really looking at the causes of the collapse; in essence both Presidents merely put a bandaid on an infected shotgun wound, when what we really needed was to fix the root of the problem and cover the wound. We should've given the bailouts and broken up the "too big to fail" companies to make sure it never happened again.
New Car Day
5 years ago
14 comments:
This is closing the barn door after the horse has gotten out, but there is an article stating that the Obama administration is going to demand the big bailout companies drastically cut top execs compensation.
Gee, it might have saved the taxpayers a few bucks if they had done this BEFORE they handed out our money!
The corporations have saved themselves with our money. These corporations have not yet helped save the consumer economy by lending the money out to the public. They have posted big profits, because of course, they get to write off their losses.
I think Tom hit it on the head...
Remember, the bailout of Wall Street was devised by Hank Paulsen, who was the head of Goldman Sachs...
The titans of Wall Street believe that we, as citizens, as workers, as consumers, are dependent upon them....
They are too big to fail because they are the reason that the world goes round...
My advice to my Republican friends is not to visit any Liberal blogs, where you will only get to be insulted by those name calling IDIOTS!
I visited a blog today and the first thing I saw was apicture of Rush Limbaugh pictured as a Cry baby. Then I made the big mistake of reading and posting a comment. Well, needless to say I was jumped all over by a pack of attacking Liberal wolves. It was not a pleasant visit.
And the other thing that bothered me was that some very hateful things were said there about Palin and Glenn Beck and GW Bush. So I felt the need to say something to try to put a stop to the childish nonsense.
Because of this harassment I was prompted to make this post.
I do not appreciate mean people especially when all I did was post my opinion that was not in the bit least argumentative, but they try to turn it into one anyway.
I'm not really sure of what you're talking about, pissed off anonymous. I read that thread. Looks like you came in, said some unsubstantiated talking points, and got refuted. Which you then tried to turn around and do an argumentum ad homimen, but that didn't work, so you then went around posting this. If you can't handle factual refutation, maybe you shouldn't be visiting blogs at all.
It's difficult to know exactly how much we are spending on all these bailouts. Whenever I start talking trillions (versus mere billions) people get used to large numbers pretty fast. Just last spring, $500B seemed like a big number. Now it’s part of every day calculations. Next up, quadrillions..The next generation is screwed.
The GOP should concentrate on finding good conservative candidates and the rest will fall into place.
We want REAL conservatives and if there are moderates that are offended by Rush and Beck than they should become Democrats.
Actually, I think people like Ron Paul should run. People who have principles, party be damned.
I'm tired of all the candidates cowing to their party. If they are elected president, they will represent the country, not their party.
As long as the government meddles in the system no confidence will be restored. People will not engage their own money and continue to hold back until confidence and private action warrants interest.
I think it's perfectly acceptable for Conservatives to take over the Republican Party.
We certainly don't need two Liberal parties (the democrats and the RINO'S), do we?
RINOs need to be made extinct - otherwise the country's doomed.
I toldjah so:
I agree with your first part. The entirety of just how big trillions really are won't hit us for generations.
The GOP should find good conservative candidates. But not just social conservatives. Conservatives from across the board, like what made the party great in generations past. We need fiscal conservative candidates, candidates who are responsible with money but progressive in social issues like gay rights, etc.
Mary Mary: I think you are way off here. Conservatives kicking out everyone who doesn't pass their ever-changing litmus test will only hurt the party. The GOP will become the small tent party and go the way of the Whigs.
OR, the party could embrace those with different ideas, those who fit in with the party's true ideals. See previous posts about the Republican Party's roots; Lincoln was a social progressive in his time. We need those kinds of candidates again. Otherwise the GOP will die off, and the Democratic Party will be the only strong party again, just as it has since the 1700s.
You're right James. If Conservatives don't embrace our ever-changing society the Party will surely die. There is nothing wrong with accepting alternative life-styles. If the Conservative Politicians stayed with fiscal responsibility and became, like you said, socially progressive, I think they'd be pretty unstoppable.
Exactly, Pamela. I think all too often these days, "conservative" has become "regressive," as in trying to go back in time societally. All too often, these "conservatives" will ostracize and try to excise true conservatives that happen to disagree with them on one thing or another. Much as Mary, Mary did above.
I call these kind of posts "awareness" posts. Why? More people are realizing that the Republican Party is full of RINOs and McCain leads the pack.
"government ineptitude and all the secrecy, distrust has been seeded instead of consumer confidence"
um...and they want us to trust THEM with our health care system??? What? Are we absolutely insane???
Okay, so back on topic: Dick Morris said something tonight that dovetails into what Mary said, "Conservatism is too important to leave to the Republican party."
I absolutely agree. His point? Why should the Rep. Party be the sole owner of conservatism? Conservatives like D. Morris, D. Armey, N. Gingrich, etc. are using their influence, visibility & $$ to promote/educate about conservative principles.
I say more power to 'em - they'll have more impact than the Ron Paul's of the world, & maintain the integrity of conservatism (minus social 'progressive' tangents).
Post a Comment