Things looked very grim for the financial markets in 2008. Things were occurring very rapidly and few really understood what was going on during those weeks (here is a reminder of the turmoil that went on during that period) I saw a number of articles and emails that indicated that there could be a massive collapse of financial institutions that made the 1929 Black Tuesday, bank runs, etc. look like child’s play. And Congress and the White House saw and heard the same. As a result, we saw TARP created and enacted. I won’t replay the entire thing here, as I’m no expert on finances. But there are some things that are certain:
- The financial system was on the verge of collapse.
- No one really knew quite what to do about it, and even many on the Right believed governmental intervention would be a good thing.
- Today, most (not all) economists say that the initial passage of TARP helped stave off collapse.
- After initial passage, TARP wound up being something far from what was originally intended.
- There is much room for debate about the wisdom of its passage.
MO Sec’y of State Robin Carnahan, the Democrat who will likely oppose MO Rep. Roy Blunt in the U.S. Senate race in MO, has seized on Blunt’s initial support for TARP as a campaign weapon. However, like most Democrats, she has basically stated that she would have supported it herself. And she is objecting to the bill, despite the fact that TARP has actually been a money-maker for the government, yielding an ROI of over 10%. And it appears that the vast majority of TARP money will be repaid in the end…many banks have already repaid.
Now Carnahan continues her two-faced treatment of the issue. While criticizing Blunt’s response to the “Midwest Democracy Project” questionnaire, she hasn’t even answered the survey herself. This would be consistent with Rose Garden Robin‘s evasion of questions regarding her positions on just about anything. Oh, and note the KC Star’s pathetic lack of journalistic integrity by publishing that story without actively seeking Carnahan’s response.
Rep. Roy Blunt was one of the Republican supporters of the original incarnation of TARP and was involved in the negotiations for its passage. He supported the original disbursement of $250B to purchase toxic assets (which later turned into capital infusions into the institutions) but, he opposed and voted against the next $100B and opposed what was done after the initial implementation of the bill. On this topic:
“So it was the kind of responsible thing the government should do as opposed to what this president did with the second half, which was give it to car companies, use it as what appears to be an on-going fund that he can use whenever he wanted to and I voted against that,” Blunt says.
Despite what one might think about TARP in general, it has not been a massive money sink. Beyond whether it was right or wrong, we must be aware of how the Democrats use the issue against the GOP. Blunt will not be the only Republican to be slimed over this by the Left. In the forthcoming campaign battles, it will be necessary to resist the temptation to say “so-and-so deserves the criticism from the Dems – they never should have supported it in the first place”. Let’s recognize who the true bad guys are: the Democrats, not our own.