Politics today is more about manipulating the minds of voters for the purpose of defeating the other party, than it is about speaking the truth and seeking the national interest.
Take, for example, what is commonly called the bailout bill. The conservatives in the Republican Party and the tea-bag zealots have cast it as a corrupt, budget-busting handout to greedy bankers on Wall Street. Utah’s Republican Party dumped Senator Bob Bennett because he voted for it. Conservatives in both parties lament that it will bankrupt the nation and our children’s children will pay the price of disastrous deficits.
This is a common view on main street, but what are the facts? Zachery Roth wrote in Talking Points Memo that now, 19 months after Congress voted to spend $700 billion on the Troubled Asset Relief Program, we are starting to get a sense of the true cost and effect. “When you look at the amount of money that the government stands to make back— not to mention the widespread expert view that the bailout succeeded in its prime purpose of stabilizing the economy— it could be that we’ve been able to rescue our economy from the brink of depression for a relatively low price.”
Roth offers some facts: The cost to the taxpayers was not $700 billion, but less than $500 billion. Approximately $217 billion of that has been returned, and the Department of Treasury now estimates that the final cost will be less than $120 billion. He reminds us that the bailout’s purpose was to prevent a complete collapse of the American financial system, and he quotes Barry Eichengreen, a professor of economics and political science from the University of California in Berkeley: “TARP enabled the banks to earn their way back to solvency… and prevented the financial system from falling off the cliff.”
Tyler Cowen, a Libertarian and an economics professor from George Mason University, opposed the TARP, but now believes “The bailouts were a good idea… (without them) we would have had more failed banks, very strong deflationary pressures, a stronger seize up in credit markets than we had… and a climate of sheer political and economic panic.”
I agree with Roth’s conclusion that even though “irresponsible bankers, after years of lax government regulation, came close to tanking the American economy” and had to be rescued by ordinary Americans who took the brunt of the recession; even though those same bankers are working to water down efforts to strengthen oversight and regulation, “we were able to stabilize the economy for what could be a fraction of the cost originally contemplated.”
Were there abuses? Yes. Is it unjust that bankers escaped whole while so many people suffered? Yes. But let’s deal with the abuses and injustices rather than condemning the entire effort. A brave and difficult decision was made amidst chaos, and a program was implemented rapidly without the time to lay a solid foundation. Against all odds, the result appears to be one that saved the nation from financial catastrophe.
These are the facts and the truth, but self-serving political framing has created the opposite view in the minds of many. To read Roth’s complete story go to www.talkingpointsmemo.com and click on “Bailout: The Best Program Evaah?”