Mark Steyn over at NRO’s The Corner had bad things to say about TARP and then got this response from a fellow conservative on the matter:
I’m totally with you except in your comments about TARP. This is a real misconception pervading the conservative punditocracy. To suggest that the first $350 billion was “completely wasted” ignores the realities of the situation. At the time TARP was enacted in October, the financial system was on the verge of outright collapse. We’re now in a severe recession, but to have done nothing at that time would have meant reenactment of the worst of the Great Depression. By injecting capital into the system, the TARP money relieved the worst of the risks confronting the system, unfreezing the credit markets. Yes, we can argue about whether this has resulted in propping up some ultimately unsustainable institutions. But the fact is, given the conditions at the time, there really was no choice.
I’m a conservative libertarian, inclined to be extremely skeptical of such large-scale government intervention. In this case, it’s important to recognize that a series of government errors were intimately involved in creating the conditions that led to the crisis – loose money, politically correct and misguided regulatory directives, and irresponsible lending behavior by government-affiliated institutions. So while such intervention is highly distasteful, the extent to which it is being compelled to deal with earlier government mistakes makes it somewhat more acceptable.
I’m a conservative conservative, and it seems to me that in TARP we ended up throwing good money after bad. In the first rush of collapse, I gave my tacit approval to the bail out – now that we’ve seen it fail, I’m opposed to any further such actions. If a company is failing, let it fail – when the dust settles, we’ll be better off for it. And do keep in mind that I work at a large financial institution whose repeated assertions to us employees of continuing financial stability are looked at with increasing doubt…in other words, I’m not at all sure that I’ll have a job next week because there’s a chance my employer might fail. And if it is to fail, let it fail…I don’t want my fellow Americans on the hook for clearing up the mess made by a senior management I view as increasingly incompetent.
The problem here has been the perfect storm of corrupt politics, corrupt economics and funny money. We can’t do anything, at the moment, about the funny money – fiat money is here for at least a while. We can do lots about the corrupt politics and the corrupt economics – corrupt, even if no laws were broken, in the sense that the former betrayed the public trust, the latter betrayed their fiduciary trust. To keep the same corrupt politicians in charge of monitoring the situation while we send taxpayer dollars to the same corrupt businessmen who run the failed firms is the definition of idiocy.
Now, naturally, Obama and his Democrats will bail out the corrupt businessmen and cover up for the corrupt politicians – this as certain as the sun rising in the east. The reason for this is that the corrupt businessmen provide large donations to Democrat campaigns (or, if they haven’t in the past, they will now – if they know whats good for them, know what I mean?) while the corrupt politicians, prosecuted, would risk the worst possible – for Democrats – outcome: a loss of Democrat power. So, we’re just going to go from exceptionally bad to miserably worse in the realm of bail outs – but we GOPers should have nothing more to do with it. Let Obama and his Democrats continue along this path without us so that when it crashes (and its not a matter of if but of when), we’ll bear no further responsibility for it.
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