Allan Sloan is a senior editor-at-large at Fortune
Allan Sloan is a senior editor-at-large at Fortune - 


Steve Chiotakis: Forty U.S. senators -- all but one of them Republicans -- say the Troubled Asset Relief Program should go away at the end of the year as scheduled. They sent a letter on Friday to Treasury Secretary Tim Geithner. Congress approved the $700 billion fund last October after the collapse of Lehman Brothers to stabilize financials. But TARP money also went to AIG, GM and Chrysler. The senators say the unused funds and any TARP repayments should go toward reducing federal debt.

In securing those repayments, the government's actually made a return -- some people throw out the word "profit" -- on some of those investments. Fortune Magazine's Allan Sloan joins us to talk about whether it's been a good ride for Uncle Sam. Good morning, Allan.

Allan Sloan: Morning, Steve.

Chiotakis: So the word "profit" keeps being thrown around, but is that the word we should really be using?

Sloan: Well it really shouldn't, because the whole purpose of TARP was to stabilize the banking system, stabilize the financial system, stabilize the world economy. And to a large extent, it's really helped do that. The fact that the government may actually collet somewhat more than it paid out for this would be to me an accident. Though I still think we'll be doing well to get back all the money that we invested in these banks back when things were really grim.

Chiotakis: If we as taxpayers, Allan, are investing our money in TARP and Uncle Sam's investment of these banks, you know, trying to bolster up these banks, shouldn't we be expecting them to make shrew decisions?

Sloan: No. Because the question is why is the government investing the money? The government is investing the money to stabilize the financial system. If you get back your original investment and a small return, you should be very happy, because the big payoff is not in what you got for this investment, it's in having a stable financial system -- which is of great benefit to all of us regardless of our tax brackets.

Chiotakis: So this is more about beneficence than it is about shrewd calculating.

Sloan: Yeah, well it's beneficence, rescue -- whatever term you want. But, you know, if the point here was to make money, the government could have hired Warren Buffett. Warren could have invested money . . . he invested in things like Goldman Sachs and General Electric, which were rates that would make a loan shark blush, and the government would have made a lot more money. On the other hand, many of the institutions that couldn't pay those rates might not have made it.

Chiotakis: The history books, Allan, are going to be writing about this. What are they going to say about TARP?

Sloan: I think it's going to depend on who writes it. If it's written by guys who are in favor of big government, they're going to say TARP bailed out the financial system, and even in the end, made a small profit -- though I don't like that word -- for the government. And if it's written by the free market people, they'll go on endlessly about how it was a boondoggle, forced government control of major institutions and was of no use whatsoever. And if I write the history, it will be somewhere down the middle, and it will be the right thing.

Chiotakis: Hahaha. Fortune Magazine's Allan Sloan. Allan, thank you.

Sloan: You're welcome, sir.