The Bard famously asked, "What's in a name?" In the case of TARP not much. It stands for Troubled Asset Relief Program, but the first word should really be Troubling. The haste with which it was created and rammed through Congress -- after the addition of $150 billion in sweetener courtesy of fiscally conservative Republicans -- is the best evidence of its flawed nature. Instead of something inspiring-sounding like "Operation Iraqi Freedom," "The Patriot Act," "No Child Left Behind," or "Clean Skies," we get TARP, which is something to keep the rain off. Given even one additional day and a modicum of belief in the outcome, the spin-doctors could have surely given us something more inspiring -- e.g., Restore America Today (RAT) or American Success Stories (ASS).
If the problem were merely the name, however, then there would be little to distinguish this from most of the major initiatives of the past eight years. Unfortunately, it also enjoys the distinction of being one of the most odious legacies of a lame duck administration in American history. To begin with, it puts the butchers in charge of performing life saving surgery. Paulson was one of the profiteers who brought us to the brink of Depression prior to being Treasury Secretary. (He made approximately $500 million in the process.) And yet, he has enjoyed the freedom to invite his former friends from Goldman Sachs to help him fix the very same system. Common sense would suggest that this is nothing short of ludicrous.
Equally as disturbing is that TARP is being used to prop up a system that seems to be be rotten to the core. Greenspan himself was forced to admit his theory -- upon which so much of our economy is based -- is simply wrong. Nevertheless, his world view continues to provide a rationale that compels us (the taxpayer) to save the banks that Paulson likes. His hope was that these institutions would get back to the business of lending, but their management teams are are not so stupid. They are holding on to the $350 billion of taxpayer money because it entails less risk than lending it right now. Hence, virtually nothing is trickling down to stabilize the markets or help small businesses to survive.
All that TARP does is make America's de facto class system clear. We have an upper class that goes by the title Strategic (instead of Lord or Prince). The Strategic include the energy, defense and finance sectors along with any individual in the 1% of the population that collectively owns approximately half the country's wealth. To protect this first tier, government has been willing to: raise the national debt ceiling to a level requiring the Hubble Telescope to see; drill anything that's not nailed down so that Americans can drive Japanese, Korean and Chinese gas guzzlers to our hearts' content; and pick winners amongst large financial players, bailing them out with taxpayer money and then letting them keep the profits. Republicans and Democrats in Congress may continue to spout their ideals, but when push comes to shove, they support the aristocracy that pays to keep them in office.
And then there are the plebeians. This class includes everyone at GM, Ford and Chrysler, as well as all their contractors, suppliers and dependent industries. According to the Republican leadership, these people all work for dinosaurs; they should simply lie down and take whatever adjustments a changing market demands. Perhaps that is true, but what is good for the goose should also be good for the gander. The automotive industry, it would seem, should be considered strategic by the nation. We have the highest per capita car ownership in the world. So if cars are not strategic, neither are banks.
TARP is not the root of all our problems: saying that would be like claiming that the Democrats bear equal blame for the current crisis. Both ideas are ludicrous. Republicans deserve most of the political blame, and TARP is simply a hasty, rudderless form of saving the upper class at the expense of everyone else.
I am not advocating socialism, but when it comes to bailouts, Motor City and Wall Street should be equal.
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