Revisiting TARP

TARP, a simple four letter acronym with not important implications politically and economically. Most Americans hate the word, it reminds us of how a bunch of rich guys got even richer by taking advantage of us, and then when they took it too far, they took even more of our money to keep themselves from going under.

Did the people who got us into this mess - most notably the bankers - deserve our charity? Absolutely not, although it remains to be seen if the new financial regulatory law will make any real changes (count me as a skeptic). But the sad truth is that even though the bankers didn't deserve our help, we had to help them, because if we hadn't things would be so much worse for the rest of us.

I've said it before, and I'll say it again. Both Presidents Bush and Obama deserve credit for their respective bailouts of the financial and auto industries. The $700 billion they spent saving those industries is an unpopular figure that is responsible for a lot of the red ink people are so frustrated about...except that notion needs revisiting. According to the most recent reports, TARP is going to cost taxpayers about $50 billion, and may even MAKE money.

Hold up. TARP could MAKE money? I need to hear it again, TARP could make money.

I'm struggling to believe it, but it might happen. But even if it doesn't perhaps we should take a moment to reflect on what $50 billion bought us. For $50 billion, we stopped the country from falling into a 2nd Great Depression. Actually, we probably prevented the world from slipping into a 2nd Great Depression.

Q: When the economy is shrinking, what do we need to do to reverse course?

A: Create jobs

Q: Where does much of the money for job creation come from?

A: Banks

Q: What do you do when big banks fail?

A: ...

TARP was an unfortunate necessity. $50 billion isn't chump change, but it's a small price to pay to avoid a worldwide financial meltdown. It's possible, if not probable that had Bush and Obama not spent that money, we'd be lambasting them for not doing enough.

The larger point here is this. It's been vogue lately to trash the government. It's too big; the elected officials compromise an elite that is out of touch with the rest of us; etc. I spend my fair share of time trashing the government too, albeit, usually for different reasons.

But the recent news on TARP should make us pause. Big government may not be the answer to all the nation's problems, but $700 billion, excuse me $50 billion worth of big government went a long way towards saving our country from an awful depression. It took two years, but two years isn't that long of a time. In fact, two years isn't a long time at all.

I wonder, what our government could do if they had a little bit of time and we were a little bit more patient. If America's leaders can prevent a worldwide economic depression for $50 billion, I bet there's a lot more they can do if we let them try.