When Government is Handy

If you are interested in the dreary aspects of bank bailouts and the like, you can track the numbers on a website maintained by the Real Economy Project of the Center for Media and Democracy (link). The site tracks expenditures by the Federal Government under the Troubled Assets Relief Program (TARP). The data are updated monthly. Significant detail, by agency, program within agency, purpose, and progress toward repayment are posted there. The data shown are peer-reviewed by economists at the Center for Economic and Policy Research. These are pretty good numbers, not rant-hype.

I am showing here a kind of summary as of July 2011:

What this graphic shows is that in a period of about two-and-a-half years the federal government disbursed or made available in other forms nearly $4.8 trillion in various ways to keep the financial system from collapsing. Of that total $3.2 trillion has been paid back (or the government liability has been removed), leaving $1.5 trillion still owing to the public.

Brutal barbarian that I am, I favored, back then, letting the too-big-to-fails fail rather than vast bailouts. Yes. That would have threatened at least a portion of our life-savings; we lost a good third of them anyway. I also think that the sky would not have fallen if Goldman, Merrill, AIG, and all the rest of the “exposed”—exposed to the mortgage crisis—had joined Enron in falling over the cliff. The responsible speculators would have lost a little of their wealth as well. Not this way.

In any case, when things to really sour, Government turns out to be handy. But when it comes to bailing out the speculators, nobody is talking deficits. But the government doesn’t just happen to have nearly $5 trillion of cash lying around idle. Therefore these bailouts had to come from somewhere. They were borrowed. So who caused the deficits? Was it Government or was it the venal private sector?

Our national “dialogue” has turned stark crazy. We can’t pay our FAA inspectors. We’re thrilled over trillion-dollar cuts to basic programs for the little people. But this morning’s New York Times tells me that even with huge mark-ups, luxury goods marketers can’t keep their shelves stocked because demand for luxury goods is soaring. How about a pair of Christian Louboutin “Bianca” platform pumps for $775? And hurry, please, I don’t want to keep the limo waiting. You know the problems one has with domestic help these days…