Tag Archives: tarp

The Real Cost of TARP

Russ Roberts nails it over at Cafe Hayek:

Please remember that the cost of the TARP isn’t the cost to taxpayers. Even if banks paid back every single penny, the cost of the TARP is that it reduces current and future prudence.

Fixing TARP: Is Transparency Enough?


The House is voting today on a bill to improve transparency in the TARP bailout program. TARP is, shall we say, rather opaque. 25 different agencies administer TARP funds. Each one uses different accounting standards. Keeping track of everything almost impossible.

I wrote an article not too long ago saying that transparency is welcome symptomatic relief. But TARP itself is a disease. The only way to cure the disease of bailout programs is to abolish them. Russ Roberts said much the same thing:

[C]apitalism is a profit and loss system. The profits encourage risk-taking. The losses encourage prudence. If the taxpayer almost always eats the losses for the losers, you don’t have capitalism. You have crony capitalism.

Transparency is a good start. But the goal should be to not have government bailing out politically favored companies in the first place.

TARP Transparency: A Good Start, but Not Enough

The new issue of the CEI Planet has an article of mine about proposed legislation to make the TARP bank bailout program more transparent.

Main point: more transparency would alleviate some of TARP’s symptoms. But TARP itself is a disease. The sooner Congress gains the political will to recover from its bailout fever, the better.

You can read the rest of the Planet here.