Thursday, July 08, 2010

on support of TARP

Against lots of vocal opposition, I supported TARPThis is why.  The assistance was necessary to stop a spiraling dynamic and prevent a banking disaster.  It was a carefully thought out plan with a way to recover funds when the danger was clear.

The unfortunate unintended consequence was that politicians across the nation saw it as a GO signal to borrow in previously unthinkable levels against the future wealth of the nation under the guise of protecting the NOW without any real understanding of what they were doing to the FUTURE.

For at least a year prior to TARP I had been watching the big three - Bair, Bernanke & Paulson - react and carefully work as a team to navigate the financial markets through what was certainly the most rocky and scary happening since the Great Depression.  I know they approached the extremes of the TARP plan with fear and reluctance.  Who would have guessed, certainly not me, that it would trigger a demonstration of full blown economic idiocy by our politicians. 

If they HAD been able to see the unintended consequences, do you think they would have proposed the TARP plan?  It's a hard call, but I'd have to say NO.  I think they'd have more carefully disguised the anticipated cost and perhaps approached the fix incrementally rather than lay out a gameplan for approval of BILLIONS in one vote.  They inadvertently gave the spending addicts in power a "how to" lesson in tapping into the nation's wealth.  Like stupified lottery winners politicians have gorged on the thrill of spending and we still don't really know how that story ends but I have to say TARP started it and WOW, what a hard lesson.  I just had no idea how really ignorant most politicians are.  I always kinda thought it was a disagreement of principles but now I think it's just plain ignorance.

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