There comes a point when the heads of several major firms are called in for a meeting with Treasury Secretary Paulson, and are told, forced even, to accept government funds. Some of the firms did not want the assistance, putting personal freedom above broader financial stability and forward thinking. Critics of the Troubled Asset Relief Program (TARP) would probably suggest that the firms that resisted were justified, and that that resistance showed the lack of necessity for the program. Mind you, these were (and are) the same firms with assets on the books that have not been fully valued even today.
One of the truths of the process, and the politics around the process, is that this minor nationalization of the banks--and we say minor because the government was not taking majority stakes, nor dictating who could sit on the board or what business could be engaged in--was the result of the Bush Administration. They took these actions to prevent worldwide economic collapse. These actions were justified and necessary to preserve the foundation of American capitalism.
Six months or so later, when we hear certain politicians and public personalities continuing to call the current administration "socialist", let us remember what actually happened, who made it happen, and why it was done. Careful observers know that the Republicans have been gaming the issue, lacking any substantive policy initiatives. We are reminded of Alaska Governor Palin's recent and extended battle with a talk show host; she made the rounds on television, expressing her outrage over the idea of one her daughters being the target of a joke. She was able to expound upon and spin the issue at great length, and with an energy and enthusiasm unmatched by any of her previous attempts to weigh in on more important national concerns.
It was truly amusing to observe, given that it was Palin's mouth that was one of the chief sources of nasty insinuations against Obama during the campaign. Those barbs and insinuations, unchecked by her brain and spilling out into the public debate, helped take the Republicans deeper down a road with no exit. The biggest news the Republicans have going, aside from Palin's outrage at talk show host David Letterman, is that some senator has been having an affair.
When the head of the Republican Policy Committee (Senator Ensign) is too busy with other non-governmental affairs, it's not surprising that Republicans are struggling to come up with policy alternatives.
As a critic, Palin was at the center of the "Obama as socialist" mantra, so she must turn to other news, to whipped up drama, to avoid commenting on the fact that banks right and left are becoming, in effect, "denationalized" under the Obama administration. Why focus when you can divert national attention to issues of modest import. Palin has yet to speak deeply on issues like North Korea or how to improve the financial structure of the banking system. She hasn't because she can't. Better to talk about the wind and the willows.
The news today is that several more banks are repaying TARP funds:
"J.P. Morgan repaid $25 billion, Morgan Stanley gave back $10 billion, Minneapolis-based U.S. Bancorp refunded $6.6 billion and Winston-Salem, North Carolina-based BB&T Corp. paid $3.1 billion, the companies said today in separate statements.
The banks are among 10 companies that last week said they would repay a total of $68 billion to the Troubled Asset Relief Program after Treasury approved the payments. Banks have unveiled plans to raise more than $100 billion in capital, and financial stocks have climbed in the past three months on signs the global credit contraction is easing."(Bloomberg)
And, while Ensign and Palin are busy with family drama that impacts nobody, the Administration has come out with new, somewhat imperfect, financial regulations that are an attempt to avoid repeating the type of mistakes that brought capitalism to near collapse.
No comments:
Post a Comment