TARP a Disaster Says Congressional Oversight Panel

Most people know that the TARP was and is a disaster, as it has done nothing but allow the terrible banking and business practices of the large financial institutions to be rewarded by keeping them going by throwing taxpayer dollars their way.

Although the Congressional Oversight Panel claims TARP stopped the financial panic while helping the banking industry become more stable, the reality is the large banks were the ones that were going under, and they were helped at the expense of the smaller banks.

To put things in perspective, when the Congressional Oversight Panel talks about stopping the financial panic, they’re referring to people making runs on some of the larger banks. To this day it’s treated like that is a problem, when what people would have done was simply transfer their money to another financial institution they felt was safer. That’s not a problem, and it should have been left alone to play out. Who cares what bank survives? Only the government and the huge banking cartel do; the reason certain ones were bailed out.

Along with doing almost nothing for the majority of the economy, the panel report reiterates it probably has caused a lot of damage because of the “Implicit government guarantees” which are a serious long-term problem coming from the way the crisis was handled.

This is referring to generating the idea that large financial institutions, among others, will always have the government come to its aid with taxpayer dollars to bail them out. The panel considers this a very serious threat going forward.

So over a year later and hundreds of billions spent, all that’s happened is the government has used our money to keep certain banking brands in business, as if that’s somehow an important part of our lives. Who cares what name is on the business, as long as they’re run well and are solvent? Keeping a bank brand artificially propped up does absolutely nothing to deal with what did and is happening, the reason it’s doing nothing for what really matters for the next couple of years.

In other words, foreclosures continue to skyrocket and the banks are protecting themselves by offering very few loans in comparison to before the economic meltdown. Small banks also continue to fail at a large rate, as the bailout funds were primarily used to shore up the banking cartel of huge financial institutions.

Incredibly, it’s being thrown around by the government to renew TARP funds so they can supposedly help small business and homeowners. They aren’t able to use $700 billion in any effective way and now they want to throw who knows how many more billions at the problem in attempts to increase their political capital? It’s outrageous.

The only Republican on the Congressional Oversight Panel, Rep. Jeb Hensarling, R-Texas, concurs, saying TARP simply needs to be closed down.

“If TARP is not wound-up on Dec. 31, 2009, and the money repaid to the Treasury, the abuses of the TARP program as evidenced by the Chrysler, GM and GMAC bailouts, misguided foreclosure mitigation programs and the re-animation of reckless behavior and moral hazard risks created by the administration’s ending-for-the-sake-of-lending programs will only grow,” Hensarling stated.

As the panel report concluded, TARP has done nothing other than rescue big banks. It also shouldn’t have been allowed to bailout out the failing auto industry either.

Areas TARP has done nothing for include toxic assets, job creation, foreclosures, increased lending and stemming bank failures other than the giant banks.

Like I said, the government has spent hundreds of billion with nothing to show for its effort except to keep their big banking friends in business.