Thursday, April 23, 2009

TARP Forever

Many Americans were outraged when the federal government created the TARP program to bail out banks to the tune of $700 billion. What's more outrageous is that several of the banks now want to pay that money back and the Obama administration will not let them.

Reasonable people can disagree on whether the Bush administration acted appropriately in bailing out the banks. However, what they were doing was without doubt, based on economics. Treasury Secretary Paulson was trying desperately to stablize the banking system. What Obama is doing is based on politics. He doesn't want the money back - he wants control. He wants control over who the banks loan to and what they pay their executives.

Stuart Varney, Wall Street Journal:
If [GM CEO] Rick Wagoner can be fired and compact cars can be mandated, why can't a bank with a vault full of TARP money be told where to lend? And since politics drives this administration, why can't special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of credit -- until now.

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