SocraticGadfly: TARPoholic neolib Obamiacs get the vapors

September 18, 2010

TARPoholic neolib Obamiacs get the vapors

The neolibs and Obamiacs are singing in praise of TARP with its second anniversary approachoing. And, of course, they're singing the praises of George Barack Obama as a large part of that.

First, Kevin Drum:
And the cost of TARP? CBO estimates the government will make a profit of $7 billion from the bank bailouts (though it may still lose money on GM and Chrysler, which were also rescued with TARP funds) and it now looks like AIG will pay back all its bailout money too. Bottom line: the ongoing recession caused by Wall Street's reckless behavior has cost us a bundle. But TARP itself? Its net direct cost is zero, and when you include the fact that it almost certainly saved the banking system and softened the recession, it may boast the biggest bang for the buck of any bill ever passed by Congress.

Drum ignores the debit side, including a financial "reform" bill that does little of the sort, and was probably enabled by TARP, and may encourage further recklessness. He also offers no proof that TARP seriously ameliorated the recession. As for AIG paying back all the bailout, the devil is in the details of stock conversions, etc.

Yglesias unsurprisingly weighs in with more on the profit motive.

Is $7 billion any more than chump change, not a real profit? Of course not, on the size of Big Banking. And, like Drummie-poo, Yggy doesn't even try to calculate potential losses.

Karl Smith ignores the idea we had a better alternative - bank nationalization - even when it's raised by a commenter.

Meanwhile, Ezra Klein decides if he's going to bury his head up Obama's ass on this, he'll go whole hog.

Reality? Bank nationalization would have given Obama easy leverage to do real financial reforms. But, with his Goldman Sachs/Robert Rubin based financial team, and outraising McCain for campaign funds on Wall Street, he never really wanted to do that. Too bad none of the above will admit that.

Meanwhile, Obama again mocked the "professional left," this time while sucking up to the rich in Greenwich, Conn., many of whom he protected from real financial regulation with his pseudo-reform bill.

It's clear that he's a flat-out liar about wanting to be "pushed" by the left. It's clear he's both a worse, and more unskilled, liar about it than Bill Clinton was on the same subject.

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