ARNOLD KLING
August 14, 2011
The Top Political Contributors
August 11, 2011
Gender and the New Commanding Heights
August 11, 2011
Jamie Galbraith Makes an Assumption
August 11, 2011
Macroeconometrics: The Science of Hubris
August 10, 2011
Real and Nominal Bond Yields
BRYAN CAPLAN
August 14, 2011
The Effect of Thumb Sucking on Income
August 12, 2011
The Voice of Cold, Hard Truth to All Would-Be Educators
August 12, 2011
Ability, Morality, and Prosperity: A Paper and a Report
August 11, 2011
The Theory of Time and Frittering
August 10, 2011
Male Variance and the Remnants of the Gender Gap
DAVID HENDERSON
August 9, 2011
Hayek in "Unbroken", Part Two
August 8, 2011
Hayek in "Unbroken"
August 5, 2011
James Bovard on the Peace Corps
August 4, 2011
Summers Way Off on FDR and 1941
August 3, 2011
The "Amazon" Tax
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Wasn't some of TARP used on the car companies? In fact, I seem to remember that the total amoun used to float GM and Chrysler amounted to more than the bank portion is claimed to have made in profit. And, yes, it isn't a profit if the banks return money that came from the injections made by the Treasury to Freddie and Fannie. Also, to generate that $20 billion, how much did the US government have to borrow for that period of time? What else could we have done with it?
Not just creative accounting, but creative lawmaking. If, as in the case of GM and Chrysler, you can defraud the existing creditors and shareholders, and give a sweetheart tax deal for a decade, prop up their car loans business, and give money or lend at ultra-low rates for "green" tech, then it might be possible to demonstrate a profit.
I've mentioned this before, but my father-in-law is a Belarussian director of a fish farm. He told me "it used to be very profitable, when the Soviets sent us the fish food for free". This is classic socialist accounting - and in fact it is impossible to determine the true profit-and-loss of any business entangled with the govt.
Treasury Secretary Paulson panicked the country to ramrod TARP thru congress. This, along with the panic already underway, increased the demand for money--slowing down the velocity of money. The Fed failed to offset this decline in velocity causing the worse recession since WWII.
Would someone please explain to ignorant me why thee 'n me are all working so hard to earn a buck if we could just let the U.S. government take all of the U.S. dollars around about and "invest" it for us to get these kinds of "profits"?
Gosh, it seems that it would be even better if the U.S. government would print all the money it could so that it could "invest" even more and get even more "profits"!
I guess I just don't understand this economics stuff....
What if you measured in gold...?
The main reason the TARP shows a "profit" is the unprecedented amount of fiscal and monetary stimulus we've seen since November 2008. When you print enough funny money, everyone's balance sheet looks great...no matter how many people are starving. As my friend Dan Ferris says: When there's no limit to money, there's a shortage of everything else.
Uh oh Bryan I hope you have put aside funds in escrow to pay this one too.
I know AIG wasn't included in the TARP funds, and I don't think the Fannie/Freddie transfers were either. The news release notes that Treasury is taking about "bank programs." TARP was a specific program, although it is used loosely to refer to all extraordinary federal actions taken at the time.
I don't understand this quote: "much of the reason for the windfall comes from the removal of much of the toxic crap from bank balance sheets onto the already hideous balance sheets at Fannie Mae and Freddie Mac." Did the GSEs buy MBS from the banks post-TARP? Can you point me to a source for this?