TARP Goals Largely Unmet

This isn't very surprising, but it needed to be said.

The government’s top bailout cop said Sunday that more than a year after the financial crisis hit, many of the goals of Washington’s $700 billion bank rescue program remain unmet and that policymakers still have not addressed fundamental problems that triggered the crisis, leaving the financial system vulnerable to another collapse.

In a 224-page quarterly report to Congress, Neil Barofsky, the Special Inspector General of the Troubled Asset Relief Program (TARP), acknowledged that TARP had stabilized the financial system. But he said that it has so far failed to restore consumer and business lending and to significantly prevent home foreclosure.

And in a slap at Congress and the Obama Administration, Barofsky said that “it is hard to see how any of the fundamental problems in the system have been addressed to date.”

He said the bailout “will have been for naught if we do nothing to correct the fundamental problems in our financial system and end up in a similar or even greater crisis in two, or five, or ten years’ time.” . . .

Of course, the bailout simply means that financial institutions will take greater risks in the future.



Blogger ged said...

Since the fundamental problem with the system (and the one that's directly responsible for most of the current problems) is persistent Congressional attempts to force both individuals and institutions to act against their own best interests in order to satisfy some political vision, one has to be extremely skeptical that any government action will ever begin to address the problem.

1/31/2010 7:43 PM  

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