Our quote of the day comes from the former Special Inspector General for TARP from 2008 until early 2011:

“Essentially, TARP successfully stabilized markets and helped prevent another Great Depression, but it failed horrifically in meeting its equally important Main Street goals—including preserving home–ownership—and institutionalized Too Big to Fail and the moral hazard that accompanies it.”

-Neil Barofsky, New York University law professor.

WSJ, March 19, 2012, U.S. Made Profit on Mortgage Debt (if we exclude the losses)

Category: Bailouts

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

10 Responses to “QOTD: Barofsky on TARP”

  1. Invictus says:

    Uh, with all due respect to Professor Barofsky, I don’t recall anyone ever talking about any “Main Street goals” associated with TARP. Those whom the government wanted to save were saved. Full stop.

  2. socaljoe says:

    …and by underwriting the failures of the politically connected class, at the expense of the general public, it has accelerated the wealth transfer from the latter to the former.

  3. illyia says:

    Full stop.

  4. Petey Wheatstraw says:

    Main Street, USA, is a ghetto.

    I’m starting to hear a lot of go along to get along mixed with a little “there but for the grace of Bernanke and the TBTF, go I.”

    We’re all partying like it’s 1999, but the bill hasn’t arrived.

    I want a separate check, please.

  5. “…I want a separate check, please…”

    Petey,

    that’s also, known as an elaboration of.. http://search.yippy.com/search?query=Odious+Debt&tb=sitesearch-all&v%3Aproject=clusty

  6. Petey Wheatstraw says:

    MEH:

    Exactly. Once again, thanks for the research.

  7. 873450 says:

    Forget about TARP goals to preserve home ownership and dis-incentivize moral hazard. After almost four years one has to conclude the program is a spectacular success and its “failures” are intentional. TARP is proof government works when it wants to, very quickly enacting major legislation and then selectively enforcing only those portions of new laws it chooses to enforce.

    Government’s swift assembly and subsequent, ongoing support of the mother of all socialist safety nets propping up TBTF overwhelmingly benefits the same tiny sliver of the population most responsible for a financial crises that crippled the global economy and permanently lowered living standards previously enjoyed by hundreds of milions, if not billions of people.

    Look at the outcomes and ask, “How is it that portions of TARP benefitting Wall Street efficiently fell into place and succeeded so well, while at the same time portions of the legislation intended to help Main Street repeatedly failed at almost every turn?”

    The finance industry engineered a disaster requiring drastic government action. Somebody has to pay for the emergency response and its aftermath, but under no circumstance will bailed out TBTF be called to account. In fact, government’s TARP program perversely rewarded TBTF’s negligent, reckless and/or criminal malfeasance. Even more perversely, TARP accelerated a 3-decade economic trend wherein increasing concentrations of global income and wealth are redistributed into the hands and control of (Who else?) that same tiny population sliver most responsible for the crisis. TARP outcomes are not coincidental.

    The notion of 99% permanently living on the financial brink always worrying about losing everything at anytime is unhealthy and dangerous for society at large. People understand greed is human nature and Wall Street is all about greed. They know much of the finance industry is predatory and they are the prey. What they hate knowing is their 100% captured government is doing almost nothing to protect them from rabid, out of control predators. Shortly after taking office President Obama told TBTF bank CEO’s he was the only thing standing between them and pitchforks. He even said “Wall Street Fat Cats” once or twice before he was captured and forgot why the electorate sent him to the White House. So far, it seems Obama’s major financial reform accomplishment is a more informative, less complicated credit card statement.

    After giving up on Obama for being ineffective, Occupy Wall Street re-introduced the spectre of pitchforks into the public conversation. They are the weatherman pointing out where the wind blows, telling us our financial predicament will not resolve until we wake up to realize the sun will still rise every day after a TBTF institution is allowed to fail or gets taken down via RICO prosecution.

  8. Well said Mr. 873450!

    For that comment alone you rate an upgrade… so for me you’ll always be Mr. 984561… a promotion very every digit!

  9. NMR says:

    I didn’t know preserving home ownership was a primary TARP goal but assuming it was this was as important as stabilising markets and preventing another great depression? Maybe? And please…too big to fail was already institutionalised into the system or has everyone forgotten LTCM or the post 9/11 measures taken to prop up the airline industry.

  10. Master Shake says:

    Let me play Devil’s Advocate.

    Weren’t many banks, especially the big ones, FORCED to take TARP money?
    Hasn’t that money been paid back, and the government actually made money on the deal?