Sunday, December 21, 2014

U.S. ends TARP with $15.3 billion profit

From CNN:

The U.S. government essentially closed the books on TARP with a $15.3 billion profit.

Treasury sold its remaining shares Friday in Ally Financial, its last remaining major stake from the $426 billion bailout of banks and the U.S. auto industry.

The Troubled Asset Relief Program was passed in 2008, in the wake of Lehman Brothers' bankruptcy, as the nation's financial system was on the verge of collapse and economists feared another Great Depression. At the height of the bailout, Treasury owned a significant stake in all of the major U.S. banks, such as Citigroup (C) and Bank of America (BAC), two of the nation's Big Three automakers -- General Motors (GM) and Chrysler Group (FCAM) -- as well as one of its largest insurers, AIG (AIG).

More here.

Back in the early 90s, I took an economics of the cable industry class at the University of Texas. For one of our sessions, we had a guest lecturer, some guy in a suit from the local cable company. He stated forthrightly that "anytime the government interferes with business, it's bad for the economy." As a fact, a law of nature or something, a principle we must never forget, something that all intelligent people know.

Of course, he was totally wrong. Sometimes the government messes up the economy; sometimes the government makes the economy better. Indeed, sometimes we absolutely NEED the government to come in and clean up the messes made of the economy by stupid and greedy businessmen. And that's apparently what happened with the TARP.

Okay sure, there was a lot more good the feds could have done with that money, and I am extremely critical that Obama didn't do more with attaching a lot of strings to the bailout. But it is undeniable that this program, originally a Bush program, so let's give him some credit, too, kept us from falling into the ravine. It saved us from another Great Depression.

Well done, Presidents Bush and Obama!

It's time for any and all misinformed, ignorant, foolish conservatives who believe the incredibly stupid notion that "anytime the government interferes with business, it's bad for the economy" either to study economics better than they have in the past, or just STFU because they're willful idiots.