How did the FIRST bailout, the corporate-friendly one, work out for everybody?

[onetwo]

We learned an expensive lesson from TARP, Part 1, where hundreds of billions of dollars were doled out to banks that immediately hoarded the funds instead of lending them out. Businesses simply will not behave counter-intuitively (spend or lend in a poor economic climate) regardless of their balance sheets.

The number one function of any given business is to generate profit. It just doesn't make any sense to expect a company to increase its overhead when demand for its products/services is flatlining or decreasing.

Big business/corporate tax cuts and similar incentives as economic stimulus is an out-and-out scam and we should all be glad that light is finally being shed on this fact.

[tavalon]

1. Nothing has changed, that I can see

Well, except for massive job layoffs. It really seems like that money just went into a black hole.

[rucky]

2. I'm facing my 4th denial for a commercial loan

Which would reduce our current payments by $400/month. We haven't missed a payment in the two years we've had the original loan, the gross income of the business has tripled, and we're asking for $50k less in principal - so you'd think this loan would "cash flow" okay.

If we don't get this loan, we lose our building and all the money we put into it, because our land contract expires at the end of the month (after the second extension). The bank we're dealing with now with got billions in TARP funds and used the money to buy out another bank. This is our last shot and now I'm having trouble with them returning my calls. We were supposed to have an approval by now.

[Dawgs]

3. The original TARP was never meant as a stimulus.

Why are you pushing this lie?

It was meant to save an industry from collapse; which it may have done.

[onetwo]

6. TARP was designed to do a number of things. However, the number one priority...

...was getting the banks lending again. "Unfreezing" the credit markets. Saving the banks and preventing a collapse are simply the means to that end. Now, we are being told that those means actually ARE the ends.

Scammed again!

[snowbear]

8. But remember too... Tarp 1 was run by Paulson's rules (or actually, lack of)

.
.

Paulson is out of the picture now.

I'll be anxious to see what Tim Geitner has to say in his speech in the next couple of days!


--

[stray cat]

4. The purpose of Tarp was liquidity and to prevent banks from crashing

I don't think it worked out well. The trouble is if we do nothing verus something we will never know how the other path worked out. Because regardless of what we do - things will get much worse....job losses are just beginning to be appreciated and even if the stimulus works beautifully the number of jobs saved are not enough to keep underemployment less than 13%.

[DCBob]

5. It is hard to defend it but one could argue there could have been a catastrophic collapse...

of our financial systems without it. But it is hard to even determine where the money went since the reporting and oversight has been so lax.

[PurityOfEssence]

7. Here's the problem: stimuli are supposed to be DIRECT

That was always the flim-flam of tax cuts for the rich: if they have more money, they'll invest it. Says who? If you want the money out there and invested, then you REQUIRE it to be so; give them the tax cut ONLY if they use the money for investment. Period.

It's because of the worshiping at the altar of free enterprise that causes people to only timidly stick their toe into the mess, and it's some kind of apostasy to do anything but nudge things in a passive-aggressive way. The leap of logic in these situations is breathtaking; we're constantly being offered this bilge water with no explanation. "Hey, let's give a bunch of money to greedy and corrupt banking institutions that have even more toxicity in their portfolios, they'll lend the money out." Sez fucking who? "Let's let the mega-wealthy skate on paying their fair share into keeping the system going so they'll invest in businesses that will benefit us all." Huh?

Now, here's the worst one: let's create a bunch of programs through private industry so they'll spend lots of money. If one REALLY wanted to stimulate things, the government would HIRE PEOPLE DIRECTLY, like a WPA project and pour most of the monies into WAGES that would get spent. This would also sober people up in a hurry and expose the lie of the indispensability of the private sector and the profit motive in EVERY WAKING ACTION OF HUMAN LIFE. I'm a capitalist, and the profit motive is pretty much essential for an economy, but there are times when one must intervene, and it's best that the intervening force is depicted accurately.

It's sort of like Faith Based spending: people think the help comes from God, when it actually comes from taxpayer revenue. That's a bullshit bit of subterfuge, just as the indirect stimulation through private enterprise is. Sure, much of the stimulation will be known to be from the government, but the free-market freebooters will have plenty of cover to hail the wisdom of the unseen hand and all that crap, and, lest we forget, plenty of money will be siphoned off instead of going directly into individual workers' wallets to be pretty much instantly spent.

The leaps of logic we're accustomed to blithely accepting are ridiculous, yet they skate right by with nary a wince.

This is the problem: people aren't spending, and too many people are failing. The price of individual failure is too great; that's one of the core reasons I'm a Liberal. To end the downward spiral, we have to fend off individual failure and keep people employed and spending. The most effective way is to do that directly, regardless of what corporatists snivel.

There is NO chance this Administration will do something like that; at every turn, they cave to corporatists because they're corporatists themselves, even if of the less hardcore variety. We can't really call them to account because they've been so thoroughly touted as shining knights of progressivity that our egos are all tied up with the myth. Their hearts are in the right place, but I think they're simply wrong. They're afraid of being labeled "socialists" by the right wing, but they're so outrageously thick-headed that they can't see that they're going to be NO MATTER WHAT THEY DO. The headlong flight to deniability and acceptability is pointless: the reactionaries do not play fair, and many of them are such ideologues that they simply don't accept that the "free market" could be this flawed. It's like hearing Greenspan's muted surprise at finding out the extend of greed in the system.

With any luck, the Administration will see that bipartisanship is a bust. If so, they might actually ram through something at least a little more direct. What really bothers me is that the continued bipartisan desperation is more based on having cover and mutual responsibility because they're not really sure that they have a workable plan. That kind of "both sides of all issues" approach is quite familiar.

[uponit7771]

9. It didn't, Fed say excess reserves went from 2 billion in 08/08 to 778 billion in 12/08. They're...

...sitting on the money while Rome burns.

[HamdenRice]

10. My ATM gives cash. I can deposit checks. So for me it worked. nt

[high density]

11. Where would we be if congress had not passed that?

TARP did inject a little confidence into the system. It maybe wasn't worth what we paid for it, but it's already done and we'll never know what would've happened otherwise.