TARP: The Long Goodbye

09/30/2010 06:37 am ET | Updated May 25, 2011

The Troubled Asset Relief Program, or TARP, is over - more specifically, its legal authority expires on Sunday, so it cannot be used for new "bailout" activities (although legacy programs, with money already disbursed, could last 5 to 10 years.)

The first draft of its history, looking back over the last two years, may be this: TARP was an essential piece of a necessary evil - that is, it saved the American financial system from collapse, but it was put in place in a way that was excessively favorable to the very bankers who had presided over the collapse. And this sets up exactly the wrong incentives as we head into the next credit cycle.

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