How TARP Doomed the Democrats

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Had the program been designed to mimic the Resolution Trust Program of the '80's to get rid of toxic debt, Congress might actually have gotten some credit for it. Instead exacting a pound of flesh, it was a payoff to Wall Street.

Jimmy of MD 3:19PM October 05, 2010

which necessitated TARP and which now makes TARP look bad as well is that the USA does not have the very high income tax rates which we should have on very high incomes. So what, for instance, if various bailout receipients got truly enormous bonuses, as long as those bonuses were taxed at about 80%?
Better yet, with those kinds of tax rates, the outsized bonuses would never be granted, AND, MORE IMPORTANTLY, you would never have seen any crisis at all from reckless risk-taking. Without the tempting lure of fortunes to be made and kept in a low-tax environment, you don't have reckless risk-taking at all in high places. Anybody campaigning on that? They should be.

Muser of NM 8:35PM October 02, 2010

OK. Where is the money banks have paid back? If it is in US treasure, $650 billion of it, why then congress wants to raise tax again, and authorize more deficit spending, like another $700 billion for stimulus, 50 billion for bailing small banks, ....
The truth is that once the government got the money, even if the money is not used for intended purpose, it will never return to tax payers in the form of low tax rates.

cindy of ME 7:08PM October 02, 2010

And you wonder why the sales of this magazine are headed down?

deanbob of TX 7:35AM October 02, 2010

Sorry Rick but you are wrong again.
Democrats are not getting killed over TARP. While it is an easy target and it is stated as a reason often, if TARP were all that was done then no one would mention it. Democrats are getting killed because of the Stimulus that did not stimulate, the Healthcare Bill that will cost jobs, the 25% budget increase, FinReg that did not actually solve the problem, and no focus on JOBS for 18 months.
The Democrats refused to compromise on any legislation for 18 months and the result is very very bad legislation. All of the bills turned out to be mostly political payback to their supporters and did not address the problems at hand. A compromise stimulus bill would have worked better at stimulating and nothing else should have been done until jobs started coming back.
If you had to blame one thing for dooming the Dems then the culprit would be jamming the Healthcare bill down our throat with no Republican amendments or support at a time when all we wanted was jobs.

Stock-MD.com of FL 6:31PM October 01, 2010

You have to be kidding. Stimulus is not a bad thing and can be necessary in situations like we are going through. But you need to have something to show for it when you spend that type of money. In the 90's with the telecom breakdown, we at least came out of it with the country wired with fiber optic cable. WE GOT NOTHING IN THIS PACKAGE!

Charlie of TX 5:34PM October 01, 2010

I appreciate where Rick is coming from, but I have spent tremendous amount of time and energy backtracking all of that money and I am not so sure I agree with the outcome he describes.
So, before commenting willy-nilly, I am back for a deep review of where the money went, how far off shore a lot of it of went and did not come back, where the source of the money came from to "repay" the loans, what it bought us (in my opinion, of course), answer my question to myself of what American economic destruction may, or may not have been, or will be forestalled. My interpretive mechanism for assessment comes down to simple balance sheet basics.
- We created a liability account (over time)
- The liability got out of hand/went weak/failure risk skyrocketed
- We borrowed capital from one fund (taxpayer) and stabilized our liability - paid to another fund - where did that money go?
- That money from the one fund (taxpayer) is now gone.
- The liability "appears" to have been eliminated with reduction,
- so where did that repayment money go? Not back to the original fund.
- Where did the capital come from to repay the infusion?
So, in infusing the liability with the strength it needed to perform, where did that work contribute to the original core purpose? There is an appearance of an incredibly swift shell game that has been played out.
Nice article, but........

MichialT of CA 4:59PM October 01, 2010

Newman states that most of the TARP money was paid back so it didn't cost as much. He then fails to acknowledge that the Dems turned around and spent that money as fast as they could, along with trillions more. If thee Dems had just been honest enough to give it back to the people they took it from then they might have had he credibility to say that they know best and have our best interest in mind. Their actions speak louder than all these phony explanations their sycophants in the press put out. James Tarranto had it right when he suggested Barak should write a book: How to Lose Friends and Alienate People."

Joe of TX 3:28PM October 01, 2010

TARP was one of the biggest frauds ever perpetrated on the American taxpayer. To say it and the phony stimulus "saved" ANYTHING is laughable.
These were payoffs to the politically connected and had nothing to do with the recession, other than offering the opportunity, which, as Rahm Emanuel stated; "never let a crisis go to waste".
Rick Newman is walking in the footsteps of John Kerry, suggesting that the machinations of the Obama Administration are just too hard for the average peasant to understand.
Vote for us, say they, for we understand better than you what's best.
NOTHING the administration has done has helped the situation.
And problem is everybody knows it.

T.W. of ME 2:59PM October 01, 2010