TARP needs a publicity agent

If the US Treasury is even close to their projections that, at the end of the day, the TARP bailout will cost US taxpayers no more than $50 Billion and actually might turn a profit, how can we view this program as anything less than a resounding success?

TARP’s paramount objective was to stabilize the US financial services industry and by extension, the global markets.  Yes, there were many other items on the wish list of objectives for the program but stabilizing the markets was by far the 800 pound gorilla of the program’s objectives.  Even the severest critics of the program have to admit that this objective was met and perhaps, even exceeded (i.e. saved some companies that might not have needed saving).

Yet despite all this positive vibe coming out of the program and the results tallied by the Treasury this week, the general consensus in the media and academic circles is that TARP was/is a failure. 

Certainly, one can understand the general public’s conjugation of the word TARP to include solving everything from job creation to healthcare, as the word TARP has come to symbolize the failure of government to address these more “localized” symptoms of the Great Recession.  However, for folks who should perhaps know better, the easy path has been to simply avoid making a distinction between TARP and other policies and programs.

The fact of the matter is that the long debated healthcare legislation and the recently passed Todd-Frank financial services reform legislation have much more to do with the affairs and the relative improvement of the lot of the average US citizen, as we recover from this mess of historical proportion.

Makes one think that, if TARP were an actual person (let’s call him Tom TARP), and he was looking for some advice, I might suggest that he spend some of that profit the program might generate to hire a good public relations firm and get the “real story” out there.

If it wasn’t such a serious topic it might be humorous to reflect on the “Mother of All Bailouts”, the Resolution Trust Corporation,  and how that, purportedly, very successful bailout of the US Savings and Loan Industry cost US taxpayers approximately $160 Billion.  Compare that ‘conventional wisdom” against the current TARP cost estimates of no more than $50 Billion (and possibly a profit) and the relative size and scale of the two events and TARP is a clear winner; a first round knockout!

Maybe Mr. Giethner should convene a séance to call back the ghost of Bill Seidman to serve as his chief spokesman.  Now there was a guy who could sell a bailout program!   While he’s at it, maybe Bill could help “Steve Securitization” with his image too!

About markferraris
Managing Principal Orchard Street Partners LLC

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