TARP wasn't intended to keep all banks from failing. Dozens more will likely fail through the rest of this year. The objective was to avoid a wholesale collapse of the nation's financial system.
Unfortunately, little effort at resolution has been applied following TARP, and that development will likely nurture moral hazard. At the same time, scant attention is being given to the issue of increased industry concentration following the failure of smaller/medium-sized banks (which amplifies the "too big to fail problem"), much less a strategy for directly addressing the "too big to fail" issue.
As noted previously, so others don't confuse my position, I favored preventing the collapse of the nation's financial system. However, I also favored resolving the zombie institutions, including but not limited to Citibank and Bank of America; breaking up AIG, selling off its viable parts, and winding down the rest (incredibly enough a significant share of the destructive derivatives positions have yet to be wound down); breaking up the GSEs and privatizing the viable parts, etc. I remain concerned about the partial nationalization of numerous financial sector firms.
I also opposed federal intervention in the automobile industry and felt bankruptcy was the better option. No systemic risk was involved. Recognizing that the federal government was going to intervene, I stated that under such circumstances, bankruptcy should be attached to such intervention.
Similarly, on grounds of an absence of systemic risk, I do not support the sometimes-rumored bailout of the airlines. The airlines have an overcapacity problem.
Don,
You don’t have to be so defensive. I don’t blame you, I don’t attack you. I justnoticed a bigger picture in the numbers you were so kind post.
You posts are greatly appreciated by me even if I argue to you and prove that you miss some points. You wouldn’t like to see your thoughts not to be challenged, would you? I definitely notice that you have been incorporating some of my thoughts in your view, and I see it as a demonstration of your abilities.
Your position had been well expressed by you and well respected by me. You say that TRAP could be OK, if the measures you (and I) have been reiterating so many times were implemented. I disagree with you that TRAP was needed, if the measures you (and I) have been reiterating so many times were implemented. I may be wrong about TRAP. Now I am saying that it does not matter at this point. I know for sure that if your plan – TARP+listed measures,- was implemented it would not be (even if you are wrong about TRAP) as destructive and damaging to America as Obama’s actions, I even think it would have a net positive result, and may be we would already be pulling out of the hole, we may be could avoid falling into the hole.
I just want to remind you that we have well passed the point, that your plan has NOT been implemented and it is NOT going to be implemented, the hazards you and I have been warning about have not been avoided but met belly straight on sword, and there is nobody here to hear our warnings about the course straight on the iceberg of healthcare, Medicare, cap and Trade. The overwhelming majority has won and we have passed the point of return. You and I lost, as the matter of the fact; it does not matter anymore who was right or was wrong – you or me.
"State capitalism" is the term economists use to describe the present increased role of government in industry. I use the term consistent with its generally accepted practice..
I’ve told you many times, some call it Fascism, some state capitalism, some socialism, - the point is that it is Anti-American.
I don’t have time to look up, but if you can link me to one of your latest posts – about Hospitals. You did not inted and thus you used somewhat loose terms, but you made a sentence over there. If I have time I would like to go over it. That sentence of yours lists most fundamental, unbreakable rules, laws of price forming and economy at all, - they are as fundamental as the 4 rules of Newton in science. Whatever is a social formation these laws are as effective and active as in any other formation. Generally my approach has been based on these fundamental laws. I never had time or chance to formulate them, now you have been the only one justone who has listed them and referred to them.
