Comments on: Time reveals the truth about TARP bailouts

By: wcvarones

wcvarones — Sat, 07 Nov 2009 21:50:27 +0000

I just ride a beater old Gary Fisher mountain bike with hybrid tires for the road. Used to bike commute when I lived in Frisco, now not so much.

By: Rick Ungar

Rick Ungar — Sat, 07 Nov 2009 21:17:36 +0000

I just took a look at your blog. Your a bicyclist! that explains a lot. What do you ride? I’m an avid road cyclist.

By: Rick Ungar

Rick Ungar — Sat, 07 Nov 2009 21:16:01 +0000

That’s partially what I’m saying but there is more. I do think the bailouts were necessary to keep the financial system from cratering. That would have hurt us all. But the government missed the opportunity to use the bailout as a means of getting these large, ‘to big to fail’ financial institutions under control at a moment where even the lobbyists would have been powerless. The government should have made a much better deal on our behalf.
As for ‘crooked’ behavior, while I acknowledge the possibilty that Paulson may have acted purposely to help out his friends, I actually don’t think this is what happened. Superceding any desire to be popular with his Wall Street buddies would have been a great fear that his boss and Paulson himself would go down in history as the men who destroyed the US economy and cratered the world financial system. I think the desire to avoid that trumps any love of friends. I think they panicked- but Wall Street didn’t. I suspect Wall Street had the fortitude to force the government to the table to turn a crisis into something of a victory. I think the government was terrified to spend the time doing this and basically just gave them the money. In fact, we know that the government made institutions take money that didn’t even want it. Personally, I would have felt better about the government’s actions if they had it together enough to use a crisis to benefit their friends. At least it would show calm, presence of mind. What happened, I suspect, was far worse. In the face of a crisis, our government panicked.

By: wcvarones

wcvarones — Sat, 07 Nov 2009 20:45:55 +0000

You are exactly right!

The institutions could have been saved without bailing out the shareholders and bondholders.

If Paulson weren’t a Goldman Sachs crook and Congress weren’t so stupid and/or corrupt, they would have wiped out the equity, turned the bondholders into the new equity holders, and everything would have worked out fine.

That’s what happens in bankruptcies every day, and the only reason it didn’t happen here is that Wall Street owns Washington.

I’ve linked your post here:

http://wcvarones.blogspot.com/2009/11/common-ground.html

By: Zaid Jilani

Zaid Jilani — Sat, 07 Nov 2009 05:40:26 +0000

Considering I work smack dab in the middle of the big policy institutions and debates in DC, I really should understand why so many in this town so vigorously defend this crap, but I really can’t. It’s scary, but I almost feel like the inertia of all this just carries itself, without anyone trying to do real stuff to fix any of it.

By: fleetlee

fleetlee — Sat, 07 Nov 2009 05:06:14 +0000

You have it exactly right, Treasury made a bad deal for the taxpayers. The insult is now that we know this was a bad deal we are doing nothing about it; other than Warren pointing out what should be done, no one is following her lead. Wall Street, especially Goldman, seems to know they have enough people in Congress on their side to do anything they want and are not afraid to reward themselves with handsome bonus payments that we the taxpayers made possible. Goldman has the system rigged so they borrow at almost 0% and make huge bets in the market with the full knowledge they are bigger now than when we were told they were too big to fail. We are the suckers if we allow them to get away with this behavior without any restrictions.

By: misterb

misterb — Sat, 07 Nov 2009 04:32:11 +0000

I don’t believe government is bad, but I do believe in bad government. I think you nailed the divide in this post. Those of us who see a role for government in regulating industry have it harder than the teabaggers – they can just trash all government efforts knowing that the government will do something to keep America from becoming Somalia. Unfortunately, the pro-government people all too frequently find themselves having to justify crap like TARP.

By: Tweets that mention Rick Ungar - The Policy Page – Time reveals the truth about TARP bailouts - True/Slant -- Topsy.com

Sat, 07 Nov 2009 02:36:22 +0000

[...] This post was mentioned on Twitter by Tweets Tube, Jay Sherman. Jay Sherman said: Time reveals the truth about TARP bailouts: Those who are against the bailouts continue to argue that TARP was .. http://bit.ly/1RBSGW [...]