Sam,
I see that I sort of skipped answering your question re: TARP directly and went straight to the logical follow-up, re: government intervention.
As to the former. I'm not an economist, but I do have the gut feeling that letting the big banks fail might have been truly disastrous. Therefore, I think TARP probably saved Main Street as much as Wall Street and, therfore, constituted good policy. (Only, however, on the basis of TARP's effect on Main Street.) Just an opinion, and not a terrible informed one, at that.
As a side note, you might be interested to know that, of the many dozens (maybe hundreds) of Wall Street bankers and lawyers that I know, NOT ONE fully embraced TARP. From that, I hope you deduce that I don't hobnob with the Lloyd Blankenships of the world.
Bankers tend to be free market guys who want to see badly run businesses fail - even if they work for those businesses. Most (at least the good ones) are sufficiently confident (arrogant, if you prefer) as to believe that they could find another job and make the same (or more) money. These guys were as angry as anyone at their own executive management - except maybe for the asset backed origination guys who were the bulk of the root cause and, honestly, I just don't know anyone at that end of the business.
The only fact tempering their resistance to TARP was the their own position in their employer's stock (a portion of those huge bonuses you hear about is always in stock/options that vest over time). Bottom line: most bankers grudgingly approved of TARP because it protected their wealth, even tho they hated the idea.
OTOH, those guys who saw it coming and shorted the bank sector (I know several who did so) were just furious. One neighbor even trotted out the Boone Pickens line that, after TARP, political risk to investment was greater in the US than it is in China. For what that's worth....
Hope that is more responsive to your question.
Marty
I see that I sort of skipped answering your question re: TARP directly and went straight to the logical follow-up, re: government intervention.
As to the former. I'm not an economist, but I do have the gut feeling that letting the big banks fail might have been truly disastrous. Therefore, I think TARP probably saved Main Street as much as Wall Street and, therfore, constituted good policy. (Only, however, on the basis of TARP's effect on Main Street.) Just an opinion, and not a terrible informed one, at that.
As a side note, you might be interested to know that, of the many dozens (maybe hundreds) of Wall Street bankers and lawyers that I know, NOT ONE fully embraced TARP. From that, I hope you deduce that I don't hobnob with the Lloyd Blankenships of the world.
Bankers tend to be free market guys who want to see badly run businesses fail - even if they work for those businesses. Most (at least the good ones) are sufficiently confident (arrogant, if you prefer) as to believe that they could find another job and make the same (or more) money. These guys were as angry as anyone at their own executive management - except maybe for the asset backed origination guys who were the bulk of the root cause and, honestly, I just don't know anyone at that end of the business.
The only fact tempering their resistance to TARP was the their own position in their employer's stock (a portion of those huge bonuses you hear about is always in stock/options that vest over time). Bottom line: most bankers grudgingly approved of TARP because it protected their wealth, even tho they hated the idea.
OTOH, those guys who saw it coming and shorted the bank sector (I know several who did so) were just furious. One neighbor even trotted out the Boone Pickens line that, after TARP, political risk to investment was greater in the US than it is in China. For what that's worth....
Hope that is more responsive to your question.
Marty