TARP Deja Vu

June 10th, 2009at 07:04am Posted by Eli

Does this sound… familiar to anyone?

From its inception, the TARP never made much sense. Forcing banks that did not need money to accept government bailouts was simply irrational.

The basis for the TARP went through several differing rationales — it began as a recapitalization of the major money center banks, then came the explanation of removing toxic assets, then it moved to freeing up credit and making banks lend again.

Its was $700 billion dollar pile of money in search of a justification for its existence.

So, in other words, it was a lot like the Iraqupation, only cheaper.

(Ritholtz’s theory, by the way, is that the whole thing was a smokescreen to bail out Citigroup.  Which I think is kinda paranoid – I think the goal was simply to give lots of money to the banking industry, but some of the recipients later decided that they didn’t need it, and that it was more trouble than it was worth.)

Entry Filed under: Corruption/Cronyism,Economy,Iraq


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