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Was TARP a necessary evil?

kir 2012/08/17 19:51:36
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The GOP keeps saying that more government is not the answer and that you can't just throw money at the situation and expect it to get better. I also hear that free market capitalism is the best and only effective form of economics. Personally based on what I've observed I agree with these principals.

So why do so many members of the GOP have no issue with calling TARP a necessary evil. Can it be that government intervention really can be a benefit or is it that they're just making up excuses as to why so many members of the GOP voted yes for TARP?

Read More: http://politicoid.blogspot.com/2012/08/mitt-romney...

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Top Opinion

  • TheBadOne 2012/08/17 20:06:04
    TARP was a bastardization of free market principals.
    TheBadOne
    +7
    The neoconservatives tried to implement a strategy that has failed many times over and it failed again. You can't create a culture of where the middle class relies on credit spending (deficit spending) so that the wealthy elite can inflate prices on assets. Had TARP not been issued, this would have forced businesses to become honest again. Unfortunately, that didn't happen. We didn't learn from our mistakes so I bet you any amount of money we'll repeat them again.

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  • eyecmore 2012/08/24 13:01:57
    TARP was a bastardization of free market principals.
    eyecmore
    They all want one thing and we're the only ones that will change the broken system.There isn't enough dedicated public servants that serve the people. big business as usual
  • Katfish 2012/08/22 16:03:02
    TARP was a bastardization of free market principals.
    Katfish
    +1
    Never should even be considered.
  • Alvin 2012/08/19 18:05:11
    TARP was a bastardization of free market principals.
    Alvin
    +2
    Another example of corporations pigging out at the public trough.
    Too big to fail- my butt!
  • Moonage 2012/08/18 18:49:38
    TARP was a bastardization of free market principals.
    Moonage
    The whole situation was fubar is the reason it got so many votes. Bush allowed it to progress because he did not feel it proper to interfere with an incoming President's economic philosophy.

    He should have done what he thought was best for the country.

    If he had, the first TARP would have died on the vine and we wouldn't be having this covnersation now.

    TARP effectively did nothing to permanently address issues with the country. It infused temporary spending primarily in the federal government which diluted the value of the investment. That's why when the TARP spending ran out, the unemployment rate stayed effectively where it was in the first place, and is trying to rise now.
  • kir Moonage 2012/08/18 19:00:28
    kir
    +2
    The track record of Republicans and Democrats should have indicated that there would have been so much support. When it comes down to it, they're both supports of massive government intervention and corporate welfare.
  • frank 2012/08/18 16:47:18
    Undecided
    frank
    I believe some of TARP was necessary, on the other hand G.M. did not change its way of doing business and is now going under again. Ford took no TARP money and they came back just fine.
  • relic 2012/08/18 16:39:33 (edited)
    TARP was a bastardization of free market principals.
    relic
    When businesses do stupid things that cause their bankruptcy, let them fail.
  • S. Gompers 2012/08/18 14:45:25
    TARP was a bastardization of free market principals.
    S. Gompers
    +1
    It was welfare and protection for a bunch of rich criminals who defrauded America.
  • Picasso's Cat 2012/08/18 14:22:57
    TARP was a bastardization of free market principals.
    Picasso's Cat
    +3
    TARP was used to purchase or insure up to $700 billion of "troubled assets," defined as "(A) residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages to promote financial market stability.
    But as we see Freddy mac and the banks went forward with foreclosures of Americans homes anyway, and that caused major hardships across America.
    So what did they really use the money for ???????
    I mean if not to help homeowners ?????
    No one is saying !!!!
    And the American people are to stupid to demand an answer from their own government, because we paid for all of it!!!
  • burningsnowman 2012/08/18 13:54:47 (edited)
    TARP was a bastardization of free market principals.
    burningsnowman
    +1
    Tarp was one of the biggest scams ever pulled on americans. Banker criminals destroyed the economy and made even MORE money off their intentionally bad deals at tax payer expense (bail outs + inflation). Criminal organizations like Goldman Sachs should be liquidated and everyone involved should be tried and convicted.
  • James 2012/08/18 03:03:11
    TARP was a bastardization of free market principals.
    James
    +2
    TARP is what made the Great Recession what it is today. If there was no TARP, we would have been out of this already.
  • Odinsown 2012/08/18 00:41:19
    TARP was a bastardization of free market principals.
    Odinsown
    +3
    Anything that seeks to control the market via outside force( for example TARP, NAFTA, etc...) Is not only unnecessary, but in the long run harmful. Trade should neither be artificially encouraged(keeping interest rates low and "guaranteeing" sub prime loans artificially encouraged the housing market resulting the recent crash) nor artificially hindered(prohibition of any good or service has in all instances created a violent, unsound, and unstable culture). Free markets do not come with guarantees, but they do come with more opportunities for success, peace via trade, and social equality.
  • InoYamanaka 2012/08/17 23:56:32
    TARP was neccessary.
    InoYamanaka
    I just like less involved Government decisions.
  • Dan ☮ R P ☮ 2012 ☮ 2012/08/17 23:50:43 (edited)
    TARP was a bastardization of free market principals.
    Dan ☮ R P ☮ 2012 ☮
    +1
    The banks didnt even buy up the toxic assets they were suppose to with tarp. They basically just took the money and ran. I'm not sure if any or how much was paid back, but at the very least these 0% interest loans allowed them to have excessive leverage to buy up healthier banks and consolidate power.

    The only reason the GOP calls it a necessary evil is because both parties are owned by the beneficiaries of tarp. Just look at the top donor lists of Romney and Obama. They always own all candidates.

    At the very least, the people should have gotten something out of tarp. I mean, we gave them nearly a trillion dollars. But no, it was unconditional, and we lose.
  • Boris Badinov 2012/08/17 23:38:00
    TARP was a bastardization of free market principals.
    Boris Badinov
    +1
    It damaged us.
  • KingdomNow 2012/08/17 21:42:55
    TARP was a bastardization of free market principals.
    KingdomNow
    +1
    The GOP does not march in lockstep when it comes to economic theory. Sad to say, the vast majority of politicians do not understand how the economy works and as we all know, none of the Democrats have a clue on how an economy works.

    The above being said, I believe that the GOP must teach its members that the only healthy economy is a Free economy, that is, an economy free of government interference so that people and companies are free to succeed or fail on their own.
  • kir KingdomNow 2012/08/17 21:57:24
    kir
    +2
    They should teach by example rather than pick Romney and Ryan who have consistently assaulted the free market.
  • Htcbm1 2012/08/17 21:28:13
    TARP was a bastardization of free market principals.
    Htcbm1
    +3
    "RINO, Republicans in Name Only"... The only thing I can think of, but it was uneccessary when you look at the history of how this all started...
  • RicardoCabeza 2012/08/17 21:17:00
    Undecided
    RicardoCabeza
    +2
    One could surmise that TARP was actually a ploy to enrich a certain population segment, the crazy thing is the recipients put the funds into their correspondence accounts and then invested the leveraged funds into world market derivatives thus bypassing the people who had to pay for the funds... creating a circumstance where TARP, QE1 and QE2 funds, were entirely diverted from the domestic money supply, I think these GOP guys are either fools or complicit in the game.
  • kir Ricardo... 2012/08/17 21:26:01
    kir
    Sadly it's the latter just like the Democrats.
  • Ricardo... kir 2012/08/17 22:14:08
    RicardoCabeza
    +1
    Yeah, it would be better to the psyche if we could simply decide they were only stupid, but it only turns out they were only in regard stupid to when it came to the tasks covering the operation of their policies, I think it will eventually inspire a new prime time TV reality show akin to the McCarthy Hearings if the facts ever get out to the Dick and Jane crowd.
  • rocat 2012/08/17 21:09:39
  • holly go lightly 2012/08/17 20:51:48
    TARP was a bastardization of free market principals.
    holly go lightly
    +5
    NECESSARY,NO. EVIL,YES!
  • TuringsChild 2012/08/17 20:49:07
    TARP was a bastardization of free market principals.
    TuringsChild
    +6
    Keynesian Economics is most emphatically NOT Free Market economics. It's a PROVEN FAILED SYSTEM that belongs in the 'dust bin of history'.

    NO corporation is 'too big to fail'. Rescuing them only exacerbates the problems. It doesn't make them go away.
  • Devil's Advocate 2012/08/17 20:38:26
    TARP was neccessary.
    Devil's Advocate
    Economists stopped believing in free market homeostasis in the 1880s. There are such things as market failures, they happen all the time, and sometimes they require fiscal mechanisms to correct them. The question is not whether fiscal measures are needed to correct certain market failures to prevent calamitous further consequences but rather what form they should take.
  • Turings... Devil's... 2012/08/17 20:50:43
    TuringsChild
    +3
    The market doesn't fail. It CYCLES. People don't like half of that cycle, so they try to control it. You might as well try to control the tides.
  • Devil's... Turings... 2012/08/17 21:10:28
    Devil's Advocate
    Market failures are wholly different from economic cycles or natural contractions.
  • Turings... Devil's... 2012/08/17 21:14:38
    TuringsChild
    +1
    Regardless, they're no excuse for govt interference.
    http://en.wikipedia.org/wiki/...
  • Devil's... Turings... 2012/08/17 21:32:05 (edited)
    Devil's Advocate
    I don't need to look at wikipedia on this, I do this for a living. My academic subject is economic history. I have training in the subject.
    I assume that there is some reference on the page, in the 'See Also' section or whatnot to the parallel phenomena of 'government failure'. I acknowledge that government failures exist in parallel to market failures. That does not address the point I was making at all. I said the question lies in what response is appropriate. That is technocratic discussion. I do not believe that TARP was a perfect law, far from it. I believe that the problem lies not in the fractional reserves of the banks, if anything, a period of capital depreciation is in the long-term interest of the financial sector. It also did not address the demand-side pressures on liquidity that are arguably more integral to the resumption of normal service.
    However, people who think that leaving the market to solve the financial crisis would have led to a better outcome than TARP simply do not know their economics. Whilst the bill did cost more than it should have and did not address all of the problems halting liquidity growth; we have seen the DJI gain 5000 points, falling inflation, lowering unemployment and GDP growth that outstrips the Eurozone nations who were also severely affected by the crisis. You cannot argue with results.
  • Turings... Devil's... 2012/08/17 21:40:31
    TuringsChild
    Yes, but what did it cost our grandchildren?
  • Devil's... Turings... 2012/08/17 21:57:37
    Devil's Advocate
    Well, you have a point there. There is a fiscal cost to the process, I dont deny this, either. However, our grandchildren would have had no kind of life if the bottom had been allowed to fall out of the economy. Given a choice between having a larger national debt to pay off and condemning them to the Dust Bowl, we havent made the wrong choice. What was the wrong choice was the debt that was run up when the times were good. TARP was an evil, but a necessary one. A necessary one that could have been less of an evil if it was handled better, granted, but still one that is infinitely preferable to the alternative.
  • Turings... Devil's... 2012/08/17 22:28:19
    TuringsChild
    It wouldn't have been a 'dust bowl'. It would have been a temporary collapse, after which the pieces could have been picked up fairly quickly. The only losers would have been the banksters who set us up for this.
  • Devil's... Turings... 2012/08/17 22:34:17
    Devil's Advocate
    No, it would have been. The banks would have had to write off enormous amounts of their assets and would have the problem of not having enough to capital to finance the levels of inter-bank lending required to keep the economy going. Without the capital, they wouldnt be able to cover the risk and creit would dry up, which is what was beginning to happen before the banks went cap-in-hand to the government. Credit is the lifeblood of an economy. It would have destroyed the global economy.
    However, I agree with your sentiment against the financial cowboys who have sunk the western economies into the quagmire wholeheartedly.
  • Turings... Devil's... 2012/08/17 22:38:51
    TuringsChild
    +1
    Yep. And now we come to the real criminals in the story, the people who foisted Fiat Money on us all. WORLDWIDE.
  • Devil's... Turings... 2012/08/17 22:43:25
    Devil's Advocate
    +1
    Fiat currency is a good thing.
    It is the derivatives traders who are the criminals. They brought the world to its knees by selling junk for a quick buck
  • Katfish Devil's... 2012/08/22 16:09:03
    Katfish
    falling inflation? The price of what went down? except for possibly labor and asian electronics.
  • Devil's... Katfish 2012/08/22 21:52:15
    Devil's Advocate
    Falling inflation (or disinflation) is not the same as deflation. The rate of inflation is falling, however there is no deflation.
  • Katfish Devil's... 2012/08/23 00:47:11
    Katfish
    I see, but you can understand the confusion if the term "rate" is not included.
    For example; if someone tells you one of your tires inflation is falling, they certainly are not referring to the rate of fill.
  • Devil's... Katfish 2012/08/23 02:22:00
    Devil's Advocate
    +1
    Apologies. The terminology is all correct but I can easily see how someone can confuse the two. Mea culpa
  • Ricardo... Devil's... 2012/08/17 23:13:01 (edited)
    RicardoCabeza
    +1
    $700 billion leveraged at the standard fractional ratio would be $70,000,000,000,000.00... And yet the TARP program did not stave off the calamitous effect of the domestic money supply contraction due to the cessation of lending... nor for the matter QE1 nor QE2 funds have failed to find it's way into the Mom and Pop economies... Would it not have been better for TARP to have simply created new banks of near complete liquidity?, and then let the brokerage houses and over leveraged banks bleed out and be consumed in the great food chain sell off and re absorbed as opposed to shoring up these errant fool's Fed accounts and thus allowing them to create a $1.6 Quadrillion derivatives market bubble?... Also, what do you think of the fiat supply theory in relation to the principles of the Enuma Elish in regard to our modern society?

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