Fwd: TARP, the Tea Party, and Me
Bruce Majors
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DRUMBEAT KEVIN DRUM ON POLITICS, POLICY, AND CATS |
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THIS WEEK IN THE BLOGOSPHERE What was I doing two years ago this month? Well, according to my blog, on September 29, 2008, I was "consumed with a debilitating combination of fury and despair." Why? Because following two weeks of unprecedented financial meltdown, the House had just rejected Henry Paulson's bank bailout bill, the Troubled Asset Relief Program. It's easy to forget just how fragile the financial system seemed back then. Bear Stearns had failed. Lehman Brothers had failed. Merrill Lynch had been sold off and AIG had been rescued at the 11th hour. Some of the biggest banks in the world seemed on the brink of failure and others just plain failed. In the United States, the Fed was tapped out, panic was in the air, and TARP was pretty much the only option left for rescuing the banking system. Even though TARP eventually passed, its initial rejection was still a key moment, one that I'll always think of as the birthdate of the tea party movement. To this day, tea partiers remain convinced that it was both unnecessary and a vast black hole for taxpayer money. Neither is true, but the tea party view is now so pervasive that, as Ben Smith reports, politicians of both parties consider TARP the new third rail of American politics. And the cost of TARP? The Congressional Budget Office 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. [READ MORE]
POLITICS A few months ago I was convinced that Palin wouldn't run at all, so it was a moot point. Now I'm not so sure. After all, she's been acting an awful lot like a presidential wannabe lately, hasn't she? [READ MORE]
ECONOMICS Fed presidents are chosen by regional Fed boards, and regional Fed boards are chosen via a complex arrangement that, in practice, ensures that all the seats go to local bankers and business leaders. So why do these board members tend to be so hawkish? Wouldn't they be better off with an expansionary monetary policy that keeps the economy growing? Matt Steinglass uses the Minneapolis Fed as a case study: [READ MORE]
MORE FROM MOJO The Deadly Corruption of Clinical Trials When you risk life and limb to help test a drug, are you helping science—or Big Pharma? One patient's tragic story. [READ MORE] |
CATS Domino vs. the Bug-Eyed Monster This picture of Domino is one of my favorites ever. It just seems so perfectly feline. Plus: Click here to see Inkblot burrowed under a quilt.[READ MORE]
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KEVIN'S MOST ACTIVE DISCUSSION Is it me, or did this mainstream business magazine suddenly become a John Birch Society newsletter? [READ MORE]
QUOTE OF THE WEEK: From a spokesman for Sarah Palin's 9/11 rally in Anchorage on whether the date was a coincidence: [READ MORE]
CHART OF THE WEEK: What explains the huge rise in income inequality over the past few decades? [READ MORE]
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