Stiglitz: TARP Returns a "Drop in the Bucket" Compared to Damage Done

Banks aren't lending because they control Washington. Why lend when Washington will let them recapitalize ( AKA make money ) risk free, at our expense, may I say.

government want convince me that my money they gave to banks are good money and it's made for my prosperity.
i think it's pure lie,government robbed me.

My buddy was kicked out of his house 8 months ago. I was by there the other day and the place looks horrible. It's at the bottom of the hill and I remember one year his sump pump went out and it started flooding badly. Add to that no heat all winter and I'd imagine this house is going to be bulldozed. I wonder how many other older homes especially, that will end up completely garbage when all is said and done. Who is going to take the hit on this? Who has that much capital? This monster is getting bigger and bigger by the day!

test

This damage is all behind us. And can't be undone. What about the future. Stiglitz urges a bigger stimulus. As the greatest living economist I second the emotion. The dollar was devalued 11% since June. It gave us no inflation. This means powerful deflationary forces are afoot. What impact did QE1 have . I have to agree with Krugman that it was de minimus. It did not cause inflation.Growth has fallen to 1.7%. It is a miracle that we have accomplished so much, come so far, with no construction industry and the resulting unemployment. The low interest rates made this possible. Thank Good King Ben.

The idea that TARP was "only" $700 billion, and that it has been paid back, is Bull Sh-t! Open bail outs were paid back by other, hidden, bail outs.. Stiglitz is spot on with his criticism.

Favorite line ever during the bailout era "Best way to rob a bank is to own one."

Also a question was ask to a prominent economist. They ask him if you would have had a few comments to recomend to Herbert Hoover what would you have told him. His comment was "Hoover don't let the Banks Fail" And this was not an interview with Bernanke however he did write his senior thesis on the great depression and his quote is that he would not let a great depression happen under his watch. The rest is history-It didn't happen He did the right stuff. Unfortunately a necessary evil but a great depression would have been worse.

It seems that many of you do not understand that Mark to Market accounting was the worst of two evils. Tarp we would not have had such government handouts if Mark to Market accounting wasn't around or at least modified. I don't think any of you experience standing on the the other side having depositors making a run on banks-withdrawing all of there money just to go to another bank in fear of their money evaporating. You didn't see it happening in front of your eyes. And if it wasn't for tarp they would not have had anywhere to go but eventually we would have gone into a great depression and all of us would be writing differently now. But Mark to Market accounting came in around the Enron scandal. Mark to Market accounting works well when you have a market but we didn't and it blew all assets down-Even the Good ones that were paying!!! When that happens you don't or cant sell your mortagage portfolio yes in a bank to another to raise money which is the normal way lenders get things done. If you look we did well without Mark to market accounting for quite some time and we did very well before the 1920s then came mark to market in the depression and then after we took it out. Fortunately the likes of Barney Frank or other on the Senate Finance Committe recognized it and modified it at around March 2009 which the stock market hit a low of 6000 when they modified it investors finally took note and the rebound was history up to 9000 at least at the end of 2009. Mark to Market has not been used the majority of our economic history and its great when you have a market but we did not and assets dried up. They are now trying to Remodify this. By the way subprime on housing was a smaller proportion or percentage of the whole mortgage market however but in Mark to Market accounting it brought the other great paying assets (Loans) down as well so nothing look good. So Tarp was a necessary evil with Mark to Market accounting in place Barney Frank said "Get it Out of Here or were Toast!! Do some Research on your own

At this time QEII is unnecessary. The financial system is not near collapse, its just masking large losses that the government has permitted by removing "mark to market" requirements. The banks are also getting a gift of almost free money which they either loan back to the government making 3-4% or invest it overseas. They aren't investing it here, look where capital is going, from the US to Asia and other emerging markets. Businesses here don't need capital because, they either have it already or don't see an opportunity here to invest in. The consumer can't really spend like they used to, they are tapped out and have lost most lines of credit. Most people can't use credit that costs 25+% unless they are desperate and then they probably will default. QEII just isn't going to help and will more likely do more damage than good. It simply won't help create jobs here.