The Bush TARP program -- extended by President Obama -- is costing us. Big time.
Of course, Monday-morning quarterbacking is so much easier than actually being in the game. Former Fed chair Alan Blinder knows the story better than most. ""Of all the financial companies that were rescued or semi-rescued, CIT was always the thinnest case, the toughest to defend. My attitude was: Hold your nose and go for it. It's something that I would rather not have seen the government do. . . . But the Fed and the Treasury and the others were in the unenviable position of being like the Dutch boy with the finger in the dike. And we definitely didn't want the dike to burst."A year ago, the financial system was tottering and government officials arranged a $2.3 billion emergency cash infusion into CIT Group, a troubled lender to small businesses.
Today, CIT is in bankruptcy court, and the taxpayers' investment is on the brink of being wiped out. It would be the largest loss so far from the government's massive rescue of the financial system, but it isn't likely to be the last.
Officials poured about $700 billion into investments in scores of companies, from giants such as the automaker General Motors and the insurer American International Group to smaller regional banks. Of them, 46 had missed required dividend payments to the government as of the end of September, according to the inspector general overseeing the program. ...
... Bankers, lawmakers, state banking regulators and oversight committees have faulted federal officials for providing funds to firms that were so sick that they couldn't recover and for failing to be open about how recipients were chosen. Some critics have also attacked the government for the types of investments they made. ...WaPo
