Posted on 05/14/2014 10:46:33 AM PDT by Kaslin
TARP was the absolute height of crony capitalism. Many of the big banks should have gone down, but in the midst of a “Blackberry panic” – as David Stockman puts it – the masters of the masters of the universe lost sight of reality and the nature of markets. Yes, Goldman Sachs would have gone down. But this would have been a GOOD THING. The blood which should have filled the the streets of Downtown Manhattan would have washed the unsustainable leverage clean from the system (for a while.) Giants are meant to fall. It would have been good for the economy.
It would have been terrible for Wall Street of course. Banks, livelihoods, careers, and reputations hung in the balance that fall of 2008. For the bankers the world was indeed ending. So in a selfish act of desperation they forced the American public to save them.
Now Tim Geithner is trying to make it out like TARP wasn’t an act of theft. That TARP was in America’s best interest. That though the banks got bailed out while average Americans were being turned out into the street by the very banks which got bailed out, and even IF TARP were a grossly unjust measure, the American people made a “profit” on their investment. So we should thank him. Geithner sites a return of 1% annualized over 5 years as a good return. Given even the artificially modest official rate of inflation as calculated by the Fed that’s still a loss of 5% in real terms.
But the American people “made billions” Geithner says.
In addition to this bit of obfuscation he reportedly never discusses the opportunity costs of intervening as he and his compadres did in the marketplace. Could we actually be 3 years into a non-Fed driven rally (perhaps the first of my lifetime) at this point without all the hocus pocus? I think there’s a good chance that we would have been if we had just let the market work as it was supposed to. But will never know now.
Geithner’s whole premise is that he flushed the market mechanism down the toilet for good reason. That without the interventions which saved his banker friends the world would have imploded. He’s still trying to sell this.
But he’s wrong. Now I felt the pain of the Crash first hand. But in the back of my mind I was thinking – as painful as it is now we will soon be looking at the chance of a lifetime in terms of buying stocks and real estate. Let things settle out. get the insane leverage out of the system and then pick up a house and some stocks while they are relatively inexpensive. This is how great fortunes are made. Lord Templeton for instance made much of his money in the wake of World War II this way.
But Geithner, by intervening with Bernanke worked to protect those who already had their fortunes at the cost of everyone else. The Templeton moment, the period where the market had gotten rid of most of its fat was never allowed to happen. So too did we lose out on the organic (not Fed driven) expansion in the wake of the bloodletting during which many people who were not invested could also have done well.
No Geithner took care of the banks and the crew within the banks. It is what he was hired to do I guess.
(From Reason.com)The return is not impressive. Geithner and the Times tend to talk about the profits—”$32 billion,” “a couple hundred billion dollars”—without mentioning the amount spent or the amount of time it was invested. The same ProPublica scorecard that shows the profit—$30.4 billion, not the $32 billion the Times claims—says $611.2 billion has gone out the door. A $30 billion return on $611 billion is a return of about 5 percent total over five years. That’s pathetic during a five-year period in which the total U.S. stock market has been returning about 19.5 percent a year, or a compounded total return of about 150 percent. Even if you use the “$179 billion” or “couple hundred billion,” figure, if it is the return over 15 years on a $611 billion outlay, it’s not exactly a spectacular success.
It ignores what the money could have done in private hands.If you divide that $611 billion among the 140 million or so individual income tax filers who were taxed or indebted to pay for the outlay, it works out to about $4,360 for each tax filer. Who knows what that money could have produced if it were spent, saved, or invested by individuals rather than by Geithner, Henry Paulson, or Ben Bernanke?
Timmy is a criminal.
Geithner always impressed me as being a light weight bullshit artist who was in way over his head. I can’t imagine anyone wanting to buy his book.
Guy’s never told the truth in his life, why should I believe him now?
He will sell plenty via the Democrat money laundering machine. Left wing library officials will line up loyally to purchase way more than needed of this junk.
The criminals have worked hard to build this machine. They love using it.
Proof that there is no limit to your success if you don’t care what happens on the ride to get there.
Timmy “Turbo Tax” was a criminal before he joined the 0bama regime, and while there, he confirmed that he is a lying, crooked weasal. Now he’s trying to re-write history.
Excellent points.
It is instructive to see how the British handled the South Sea Bubble of 1720.
The Bubble was actually allowed to collapse (not that the government of the time had the mechanisms that could have prevented it), and some of those who profited unjustly were forced to cough it up. Some of those who committed bribery and other crimes were prosecuted.
None of that happened here.
http://en.wikipedia.org/wiki/South_Sea_Company
Brits i 1700s had an excuse. Nobody really knew the drawbacks of a bubble. What’s ours?
The whole system has become criminal
And that could not be allowed to happen. End of story.
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