> This doesn't sound like ruthless criticism ...
I'm not so sure TARP is worthy of ruthless criticism. It may turn out to be the smartest thing they've ever done. It's still unfolding, but it's a decent example of what the "power of the US government" can do when it marshals that power for good instead of evil. We were in a tailspin and they popped out the air brake.
Don't get me wrong, the bastards who got us into the tailspin should be in jail; and certainly the US government could do this kind of thing a LOT more often and in a lot more situations for my taste. Imagine if they didn't fight wars, but instead figured out ways to solve structural problems inside the borders. Hah!
> Allowing them to sell at a rock bottom price doesn't
> sound like a loan. Sounds like a gift through price-fixing.
Oh, it's a gift alright. But it's the kind of "gift" that you'd give someone by dropping them a rope when they fell into a well. And when they climb out, you charge them for the rope. It's actually the ultimate expression of Vulture Capital, big enough that the Usual Suspects balked at the idea. Although of course now many are trying to ride the last bit of it out. Did you see AIG wants to buy back a big part of their (ex-)portfolio?
I'm sympathetic to the idea of "fuck them!" ... until the next thought enters my head: what then? You go first with your idea; show the math.
> Also, why would the Financial Times
> give a figure like $12 trillion for the bailout ?
Beats me. You screwed up the difference between asset purchases and expenses; you'll have to find an exact quotation for me to respond to. But if you read it as "the cost of the bailout is $12T" you're way off.
> Anyway, if it's a loan program , they could loan $200 billion
> to the states and cities, at very low interest rate with a
> long payback.
I think you'll find that I proposed this last week, and Doug said he liked the idea.
http://lbo-talk.org/lbo/Week-of-Mon-20110321/003136.html
> Also, if this was all just a loan, why were people here
> getting on Obama for not expropriating the banks ?
You'll have to ask everyone else; me, I was against it. I'd like them to take over the (vast majority of) (owner-occupied) (below a certain $ threshold) household finance market, but that's totally different.
/jordan