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How did TARP become so unpopular?
Neil Barofsky, Treasury special inspector general of TARP, prepares to testify during a Senate Finance Committee hearing on Capitol Hill in Washington D.C.
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TEXT OF STORY
STEVE CHIOTAKIS: This weekend, the government winds down
the Troubled Asset Relief Program. A lot of people thought TARP would cost taxpayers hundreds of billions of dollars. But yesterday Treasury Secretary Tim Geithner said it could wind up only costing $50 billion at the most.
Still, as TARP turns two-years-old this weekend, Marketplace's Jeremy Hobson reports it's about as unpopular as a screaming toddler.
JEREMY HOBSON: The TARP was passed by the Bush administration with the support of both Republicans and Democrats. Lawmakers were hoping to save the world from financial collapse, but they're not getting many thank yous right now from the American public.
MICHAEL WILSON: In the end, we're still in kind of the same straights, so as far as I can tell it didn't work at all.
That's Michael Wilson in downtown Los Angeles. This is Kevin Treavor.
KEVIN TREAVOR: I think it did help somewhat, but it's really hard to measure whether they should have done more or should have done less.
Talk about backseat driving. And the frustration echoes from coast to coast. Here in New York, we found Johanna Weiner.
JOHANNA WEINER: It didn't help the people that needed the help as far as I know. I mean because I don't know who's lying and who isn't lying and it has made me very mistrusting.
Many economists believe TARP did stop the financial system from collapsing.
Here's Mark Zandi, the chief economist at Moody's Analytics.
MARK ZANDI: That was a slam dunk success. There was no aspect of the policy response to the financial panic or Great Recession that worked out better than the bank bailout.
So how did it get so unpopular? I asked Jonathan Alter, who wrote a book called "The Promise" about the first year of the Obama presidency.
JONATHAN ALTER: The question that a lot of Americans asked was: Hey, where's my bailout? These rich guys are getting bailed out. Where's mine? And "where's mine" is the oldest question in politics.
And, he says, TARP is so complicated and it's changed so many times most Americans can't keep up with it.
JONATHAN ALTER: First of all, voters don't even know that most of the money's been paid back because they don't pay attention to things in that level of detail, and they have conflated, many of them, the TARP bailouts with the stimulus.
The Obama administration has tried to get its message across. But Alter says officials should have followed FDR's example. In his first fireside chat in 1933 he spent a few moments talking to the American public -- about banking.
In New York, I'm Jeremy Hobson for Marketplace.
CHIOTAKIS: See how much money's been dished out from
TARP and what's been returned.
The answer is simple. In a capitalist country if you play and lose, you should accept your loss. You should not be bailed out by the taxpayers who get screwed all the time and get called "the little people" by the super rich who claim they know what is good for us.
You were too soft on TARP. It was wrong thing to do. Where is the payback money is from the taxpayers.The payback is re-
placing a visible bailout with an iinvisable one.AIG is still losing money, so how can it pay back? So
who is buying it?
To whom it may concern (in the corporations and in my government): How about we start letting common citizens run things again? Leaving it to the corporate lawyers has brought us 1000+ page legislation that even the lawmakers cannot understand. It's not just destroying the political process. It's brought us deceptive mortgages, confusing 50 page legal agreements to update our Itunes software, renew our credit cards, etc. If we can force the food industry to use a simple chart on the side of a cereal box, why can't we persuade the financial industry? There's a reason why the Constitution fits in your back pocket!
I am sick of hearing the debate on the tarp! of course it worked, the banks and the politicians were all well taken care of, and the people of America were robbed blind. That's what they wanted and that is what they got!
We still have record foreclosures and record unemployment, the CPI went up and consumer spending went up too, DUH! Now the white house is saying that we are recovering because of that!
are they morons? when the CPI goes up we have to spend more just to survive! That's like saying that consumer spending is awesome in Zimbabwe!
The Fed has spent over 1.5 trillion dollars buying toxic mortgage securities. In essence private banks created 1.5 trillion out of thin air to give to the very private banks that own the Fed. This is a pure bailout sanctioned by the Federal Reserve board.
Banks can get money for less then .5% and loan it to the federal government risk free for 2%. They may receive money from the US government for refinancing and even more abusive from numerous foreclosure situations. The litany could go on…
By my math Tarp like programs come close to 2 trillion not 50 billion. Maybe it is a good thing the media does not better inform the public.
Since ratings are king, even intelligent media is challenged to make facts like these entertaining. American Public Media consistently comes as close as any source, regular media has no hope at all.
