TARP propaganda

Booman (TARP will probably make us a profit): "at least we got our money back from the banks".

That's gotta go down as one of the dumbest statements I've ever seen blogged.

The context is the propoganda that the administration is going to be pumping out over the the next few days that with one part of the bank bailout, TARP, ending, 'we didn't give it all away' so be happy. What a load of crap:

Bailout Not Over, Taxpayers Still Owed $2 Trillion In Federal
Reserve Loans and TARP Program Funds

Madison -- On October 3, 2010 the U.S. Treasury's Troubled Asset Relief Program (TARP) will end.  The expiration is likely to generate many celebratory claims from federal government officials that the bailout is over, and that taxpayers have been made whole or will be made whole in short order.  

While it is true that many TARP bailout programs have ended, our research shows that money is still due to taxpayers under the TARP. More importantly, the research shows that the U.S. Treasury Department's ten TARP programs represent less than seven percent of the $4.7 trillion disbursed by the U.S. government in an effort to aid the financial services industry.  Far more money has been disbursed by the Federal Reserve to prop up the financial system than by the U.S. Treasury, and those loans are still outstanding.

That's via the Center for Media and Democracy's email. They provide a bit of context:

After a public outcry against bailing out the big banks, Congress voted down the bailout bill by a vote of 205-222 on September 29, 2008. It was later passed in the House and Senate the following January.   

Because there were few strings attached to the TARP bailout program (banks were not required to lend, there were no restrictions on dividends and few on executive pay and bonuses), the program has become increasingly unpopular.

 According to a recent report by the Congressional Oversight Panel, "The program is now widely perceived as bailing out Wall Street banks and domestic auto manufacturers while doing little for the millions of unemployed or struggling homeowners. Treasury acknowledges that, as a result of this perception, the TARP and its programs are now burdened by a public 'stigma'."

Booman doesn't even have the simple facts right. The TARP pricetag never reached $700 Billion, with only about half that being dispersed:

TARP $307.6 billion (7%)
$117.7 billion (6%)
Non-TARP $4,4152. billion (93%) $1,815.8 billion (94%)
Total Bailout $4,722.8 billion

$1,993.6 billion

Spinning TARP, which has over $100 billion outstanding, as some sort of godsend, is on par with hearing that combat ended in Iraq, even though 50,000 troops remain, and private contractors have tripled.

Watching people who label themselves a progressive try to spin this crap is pathetic.

Here's more on the total Wall St bailout cost via SourceWatch.

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95% of Booman is 'Clap Louder'

I don't waste my time reading Booman any longer.  It's really too bad because he used to be a lot more thoughtful.  Now, it is various degrees of Clap Louder.  It would really serve him and the other Obama fantasy bloggers to read some of the financial blogs.  Naked Capitalism and The Automatic Earth are non political blogs and they simply excoriate Obama's handling of the financial mess.  Booman will have none of it though.  I don't have time for people in fantasyland.

by weinerdog43 2010-10-01 08:12AM | 0 recs

Within the last 2-3 months Booman has been far less critical of the administration but she makes it clear why.  And those that can't recognize and respect her reasons are the ones truly living in fantasyland.

by Satya 2010-10-01 08:44AM | 0 recs
RE: fantasyland?

Booman is a dude.

by Jerome Armstrong 2010-10-01 10:39AM | 0 recs
Within the last two or three months?

One word: No.

Booman has been shouting down critics and defending the punching of the DFHs pretty much from the beginning. Everything is 11th dimensional chess or a "pragmatic" flushing of principle down the toilet. Once in a great while, Booman might make some mild criticism of Obama, and then castigate commenters who agree with that criticism. I gave up on Booman a long time ago. Principle matters.

by Romberry 2010-10-02 01:06AM | 0 recs
Good grief
Did you even read Jerome's post?
by weinerdog43 2010-10-01 09:39AM | 0 recs
Yup, read it.

I didn't comment on his post did I?  There are a couple of reasons for that, mostly because this is still superficial information about the "bailout".  I would be very interested in discussing it but today is a bad day.  I promised a couple of hours to OFA for calling into Wisconsin to GOTV for Feingold.

by Satya 2010-10-01 10:12AM | 0 recs
RE: Yup, read it.

Superficial?  Yes, make some calls to help out Russ, thanks. Then come tell please.

by Jerome Armstrong 2010-10-01 10:40AM | 0 recs
Fed Funds

Federal Reserve Loans are not tax-payer money. Rather they are the banks own monies which they deposit with the Fed, which is then lent out by the Fed. If the banks are unable to pay back these loans (for which they provide collateral anyway), it's no biggie for the tax-payer at any rate. Worst case scenario the Fed will make a smaller profit which they won't be able to pay to the treasury like they have been doing all these years.

So what's the problem here?

by vecky 2010-10-01 12:38PM | 1 recs
RE: Fed Funds

The numbers are silly.  There are part of the quantative easing prgram of the Fed, and are secured. 

I frankly don't pay attention to Jerome about this stuff.  Jerome doesn't know much about this it: just ask the SEC .That the TARP helped avert a Depression was averted is also pretty much beyond argument.  We got paid back, though you can make a serious argument that we should have gotten more back than we have given.

by fladem 2010-10-02 09:47PM | 0 recs

Even Jerome, who was fairly active at the time, knows this is false:


After a public outcry against bailing out the big banks, Congress voted down the bailout bill by a vote of 205-222 on September 29, 2008. It was later passed in the House and Senate the following January.

TARP was passed by the Senate on Oct 1 and by the House on Oct 3 and was signed into law on the same day. Most of the TARP money was disbursed in October itself.

by vecky 2010-10-01 12:46PM | 0 recs
"propAganda" in headline

yours for copyediting even on the Internet.

by InigoMontoya 2010-10-01 02:39PM | 0 recs
Robbing Ben to pay Barry!

That, in short, is what's going on! Those banks are using the money they lend incredibly cheap from the Fed to pay off their debts to the government. Everybody could do that under the same conditions! That's not evidence of any return to economical normalcy at all.

by Gray 2010-10-03 09:48AM | 0 recs
What really matters

What really matters isn't the magnitude of the loans.  Banks have "bailed out" prospective home owners for decades to the tune of trillions in the form of mortgages.  But the deals are structured so that the banks get that real estate in the case of default and in total the real estate has value.


Contrast that with realestate loans made just before the fall.  People who had no way to pay back the loans getting money they could never pay back.  This is the kind of loan GM was.  The US government made this loan because it was a loser and the money community knew it.


I don't know the answer regarding the fed bailouts vs the tarp bailouts but if the fed bailouts are secured and the tarp bailouts aren't then thats a real issue.


If tarp ends up being the US government eating 150 billion then thats 150 billion of cost to taxpayers.  If the fed "created" 3 trillion of asset in a 10 trillion dollar economy there are two things at work, one this creates inflation which raises real asset values in terms of dollars.  This raises realestate values and to a large degree is the correct medicine.  Even if you lose 500 billion via non tarp its not clear how much of that is US government loss and the inflation created is good for the economy.  I use inflation but negative deflation may be a better term as this move reduced deflation more than creating inflation but its the same thing we just call it different things when its positive then when its negative.


The debt isn't apples to apples.

The effect of having the debt repaid isn't apples to apples.

But its troubling that we don't see the media talk about the fed bailout at all.


by donkeykong 2010-10-04 12:28PM | 0 recs


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