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This precisely what I have been saying for a while now. We got at best hoodwinked and at worst totally screwed. TARP was one off the worst ideas ever.
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We have had this discussion before, and I while I don't think the bailout was handled well, and lots of things should have gone differently, I understand the impulse that congress had to "do something now." My preference would have been that any money to banks been direct purchase of assets, so many banks would have been effectively nationalized. That would never have flown with economic conservatives that hate anything that smells of nationalization.
Second, I would have preferred that congress first look to consumers and provided funds to prevent individual homes from being foreclosed on and to save pensions. But again, most economic conservatives dislike the pro-individual buyer approach because the view is that poor people with bad credit and low-paying jobs should have known better than to take out huge loans. So they share equally in the disastrous results.
Any bailout should also have imposed notable regulations on the industry has a whole. But economic conservatives opposed those measures because they believe the market is best left to self regulate. In addition, I would liked to have seen congress require than any firm that received direct government assistance be required to axe the top 5% or so of their management--those guys fucked up, and best they deserve to be fired, and at worst brought to trial. But that will never fucking happen.
No, that was my wish list. Was it going to happen? Fuck no. Would a better agreement, a compromise between my wish list and the wish list of economic conservatives have been possible? Maybe. But that would have taken weeks if not months. In the mean time, the whole system was collapsing in upon itself. We don't know what would have happened if nothing had been done for months. We know that the bailout did not make things worse in the immediate. (Though it might in the long run). But that's about all we know for sure at this point. Had congress not done anything, we could be seeing 1 million layoffs rather than 500,000. We don't really know because we can't examine a world where nothing was done.
All we can do is wait and see ow things play out before we can reach a conclusive verdict--and that may take years. In the immediate, congress can act to fix some of the oversights and problems. Any fuck hole CEOs that gave themselves bonuses or threw parties at the tax payers' expense can get a bill from the federal government. The government can assert all kinds of economic penalties or bring fraud charges against them (though that will never happen).
It is really easy to complain about how badly things have been handled, and yes, the plan was not well-constructed and it could have been done way better. But there was a very real chance that doing nothing would have been worse. We can say "Well, the probability of disaster didn't outweigh the real cost of the bad plan that was approved." But we don't really know that. If we had done nothing we might just well be saying "Damn, doing anything would have been better than this global depression we are now in. Sucks that US employment just reached 18%." Again, we don't know.
The game isn't over people. Money has been dolled out (sort of), but congress still has a lot of control over who gets what and where it goes. The point now should be serious discussion about where its going. And let's not forget that anybody who got money can still receive a bill. Or the government can raise corporate taxes to recoup the bailout losses once the system is back on firm footing.
Hopefully, this will encourage congress to impose some greater regulations, we will crucify Phil Gramm publicly, and the dumb ass notion that business can ever effectively self regulate will final be cast into the gutter the same was that Maoist- or Stalinist-style Communism has been. This doesn't mean that capitalism or communism are flawed overall, just that the pure ideology always has disastrous results that its faithful refuse to acknowledge.
But I suppose I am kidding myself. The rich bastards (I believe) that are at fault for all of this will always end up getting away with murder and the rest of us will take in the ass. And bailout or no bailout that was going to happen.
I say looking at TARP as it is now and how it has been implemented, it is a failure. In what way has it produced ANY REAL WORLD positive results? Job loss (including in the financial sector from a bank that claimed they didn't even need bailout funds but took them anyway!), dividends paid out, shoring up funds, executive bonuses for bad decisions and failure (I want that job!), buying other banks and financial institutions, non-transparency in bank transactions using public funds, a FREEZE on lending to even good credit customers, the change in government strategy to not buy failed assets (nice bait and switch guys!), the list goes on and on... Blame conservative, blame liberals, blame reps or dems, any way you slice it...
IT IS A FAILURE!
If by some weird miracle, it stimulates the economy in some way later, I will eat my words. I know I am looking short term, but JFC the banks are blatantly screwing us over, how is this going help in the long term... aside from helping the already super rich who f*cked us in the first place! Yet again our government fails the people by rushing to quick decisions without due diligence (the only difference in this and the other bad decisions made in the past 8 years or so is that the American people were actually against this plan!). Hooray for American politics!
We aren't arguing over whether this plan worked. So far, I agree. It has not worked well. But we do have to wait to see what happens. It takes time to see real economic change. I am not saying it will work. I am not saying that TARP was a good plan. I am saying that I understand why something was pushed through very rapidly. When a couple of the biggest banks in the country fail within the same couple of week time period the situation is dire. The direness might have been exaggerated by some people (pundits, politicians, CEOs), but don't think that it was trivial. It was a huge deal. There was a very real need to find some way to halt the hemorrhaging. You can look back and say a tourniquet was a was idea because the limb had to be amputated, but at the time death from blood loos might have been a very real (and worse) outcome.
Again, I am not saying that TARP has been well executed and I outlined my "wish list" above. But that was never going to happen because people on the other side of the economic fence would have pitched a shit-fit. Just as I would have if economic libertarians had won out and decided to do nothing, letting lots of working class people lose their jobs and have their debts recalled. In working out a compromise everything might have, and likely would have, become much, much worse. Remember, this doesn't just effect our economy. Lots of countries suffered fallout and most, almost all in the west in fact, did something. Iceland nationalized banks, England had a bailout, etc. But the important thing is that bank collapse here also means foreign countries aren't investing in the US, so trying to shore up banks and prevent collapse didn't just help CEOs, it was supposed to help all the jobs that depend on foreign trade and foreign investment.
You speak the words "economic conservative" as if they were a expletive. I'd like to point out that any economic conservative worth their salt would not have engaged in the practices that resulted in this fiasco in the first place.
And just letting consumers take it up the ass isn't in the best interest of an economic conservative anyway. You'll find yourself in the red and in the breadline in a heartbeat if the market cannot consume your goods and services.
Most "economic conservatives" have been arguing *for* assistance to homeowners... just not by absolving of them of their debts or bailing them out for free. Absolving people completely for their bad or ill-informed decisions isn't a good idea, and in my mind, ethically skewed anyway. I have no problem what so ever giving people a helping hand through renegotiated terms and what not... Especially those who were misled by the afore mentioned banks into thinking they could live beyond their means. But there must be repercussions to making bad decisions, and letting one's self be fast talked into doing something dumb. Especially when people who made smart decisions, who live within their means and are living paycheck to paycheck, live right next door.
This bailout has rewarded the banks who engaged in reckless practices by saving them from themselves, without any strings attached, while, as Pope has pointed out, the end consumer is taking it in the ass because the situation for consumers in trouble hasn't really changed, and now those with reasonably good credit can't *get* it. It's an example of worst kind of sloppy Liberalism in American politics: "Just throw taxpayer money at a problem, and everything will pan out, I'm sure."
I don't have a problem with responsible liberalism, no more than I do with responsible economic conservatism. And this bailout is blatantly neither.
The auto bailout was "better" (if bullshit can come in the form of "good" or "bad", that is), but why on earth couldn't we have taken a week or two to add that kind of structure to the $700 billion instead of the 14? FFS!
In the end, in every poll I saw, a healthy majority of Americans opposed both bailouts in similar numbers. But, I guess the will of the people pales in comparison to the perseverance of a good lobbyist.
I disagree that it is the fault of conservatives or liberal, it is the fault of the government as a whole. Whether leaning left or leaning right, the decision was wrong. Period.
I also disagree with the idea we need to wait and see what happens. Without transparency in the financial dealings of TARP funded banks we are just prolonging and increasing the amount the banks are going to screw us (I am only going on history here - they will screw us). We must institute strict oversight on where the taxpayer's money is going. We should...
*exhale*
This issue gets me really worked up. To in one swoop give away more money than spent on the Iraq War so far without due debate and consideration is shameful. I would like to echo Beck wholeheartedly and say the financial sector could have waited a week or two in the least for some serious debate on this issue (700 vs 14 - FFC indeed!). I am completely ashamed of our government. We live in a fucking Plutocracy! Democrats, Republicans,Liberals, Conservatives, it doesn't matter. All that is obvious is that money instructs the movements of our government with no regard for the general welfare of the nation or the common man. That makes me sick.
I think you both missed my point, though in different ways. For Beck, I wasn't blaming economic conservatives per se. I was saying that I understand why the bill was forced through prematurely. The middle left and middle right realized that in engaging in lengthy debate the more extremes of sides of both parties would never agree. Oddly, they would have agreed with one another. A lengthy debate would have pitted the core values of liberalism versus social democracy versus economic conservatism versus libertarianism. That is debate that needs to be had for sure, but not when the system is potentially collapsing in upon itself.
You both I think misunderstand my main point: My argument was just that I get why the more middle of the road crowd said "shit, we need to do something now. We agree on that, so let's just shut the fuck up and do it soon. We can work the rest out later." I don't know that it was a good idea, but I understand the threat. Could they have waited a few weeks....maybe. Maybe the deal would have been better. But it also could have seen 5 major banks collapse instead of 2 or 3. We could be seeing 1 million layoffs rather than 500,000. Or, one side could have one out over the other. In which case, we might have gotten a better thought deal, but one that would not have likely satisfied one or the other of you anyway. If liberals had managed to have one out, we would have likely seen a quasi-nationalization of the banks--equal shares of stock for capital, which likely would have been controlling shares in many cases. I personally would have loved that. If economic conservatives had one out (not libertarians mind you) I actually imagine the deal would have looked pretty similar but the amount would have been much smaller and there would have been even fewer restrictions on things like CEO pay. Not sure which would have been better. Both might be better than what happened. But there is no way to know what impact weeks of debate might have generated. Hell, it could have been way, way better.
Now, the major point I will agree with is that there is little to no transparency. Beck, I am sure you will hate this, but my gut tells me it is that conservatives didn't like the idea of the government telling banks what to do with the bailout. Hell, it isn't even my gut. Look at what they said about the auto bailout, which you seem to think is better shit than TARP. Congress wanted clear accounting of where the money went and an Auto Czar to police the funds and the industry's reforms. Conservatives were at best squeamish of oversight and at worst hostile to the Czar. Maybe it is an issue of extent, but the record shows how much conservatives tend to hate policing industry....which is what the fuck got us here to begin with.
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