The notorious TARP, the bailout of banks, insurance companies and automakers is finally finished.
It expires today.
And the final accounting is going to disappoint some very angry people: It wasn’t so big. It did a lot of good. And it may even turn a profit.
It was, in short, a big government solution to a horrendous problem — and it worked.
Treasury Secretary Timothy Geithner announced agreement on a key part of the repayment last week in a recap of the program — a plan for the insurance giant AIG to repay, over time, the $70 billion it received.
That comes atop a year of repayment deals with banks and automakers.
Popularly thought of as a $700 billion loss for the American taxpayer, Geithner said the program is likely to break even or even earn taxpayers a profit.
You will recall that the “bailouts” started in 2008 during the administration of George W. Bush, a Republican.
And they began only after the carnage that resulted when the government allowed the investment bank Lehman Brothers to fail, bringing the entire banking system to the brink of collapse.
President Barack Obama and a Democratic Congress picked up where the Republicans had left off, authorizing the $700 billion program to prop up the system.
Although many seem to now have amnesia about that period, some economists were predicting a second Great Depression. Something had to be done, and TARP was that something.
While $700 billion is still bandied about, $387 billion was actually disbursed.
Financially, the program was a winner. Politically, a loser.
The picture of irresponsible Wall Street bankers getting bailed out while ordinary Americans lost their homes is impossible to erase.
It wasn’t fair. The ship was sinking and only the captain and crew — the people who steered the boat into the iceberg — were rescued.
Millions of other Americans were left to drown in mortgage debt and unemployment, and the ugly process is still unfolding.
It’s tough to put a positive spin on that, other than arguing that without TARP, it could have been far worse.
And, yes, those who voted for the program — including a variety of Republicans — have paid, or will pay, the price at the polls.
The New York Times interviewed one of those people last week, “Bailout Bob” Bennett as he became known in Utah, a four-term Republican who lost his seat in the primary.
Bennett remembers people “screaming” at him that he had “saddled our children and grandchildren with $700 billion” in debt.
“My career is over,” he told the Times. “But I do hope that we can get the word out that TARP, number one, did save the world from a financial meltdown and, number two, did so in a manner that, I believe, won’t cost the taxpayer anything.”
In a chaotic, crisis situation, TARP turned out to be the right thing to do.
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