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Editorials Oppose TARP Expansion

Editorials Oppose TARP Expansion

JANUARY 14, 2009

Investor's Business Daily Editorial: "Show Us The Money"

Excerpts:

  • "One of the key principles of those who want to shrink government, lower taxes and promote capitalism is that the people should know what government spends their taxes on."

  • "House Banking Committee Chairman Barney Frank, D-Mass., whose advocacy of forcing banks to be instruments of social justice helped cause the mess we're in, is also pushing TARP reforms that would impose ‘the most stringent nontax executive compensation restrictions' - including forbidding golden parachute payments to executives and applying executive pay limits retroactively. Unfortunately, this is what the lack of transparency and no clear strategy for exactly how the rescue money would be used has set us up for: The micromanaging from Washington of the biggest financial institutions."


  • "Letting the federal government - which caused the problem in the first place - tighten its control over our financial system will bring us no good and may help slow our recovery."

 

Nation Review Editorial: "Roll up the TARP"

Excerpts:

  • "Congress has yet to release the second tranche of the $700 billion Troubled Asset Relief Program (TARP), but with credit spreads down and commercial debt issuance up, it looks as if the credit markets are to a large degree unfrozen and an additional $350 billion is not necessary at this time."

  • "The plan was pitched to Congress as a troubled-asset purchase program, but that proved too cumbersome to implement. Instead, Treasury switched tactics and injected capital into the banks to strengthen their balance sheets."


  • "Since that time, the credit markets have started to thaw, and commercial lending has resumed at something resembling a normal pace. Granted, there is still a lot of bad debt to unwind, and we may yet see a few more large corporate bankruptcies. Growth will remain sluggish and unemployment high for the next few quarters, but these are lagging indicators; they can get worse even as things are getting better. At any rate, the acute crisis of confidence appears to have passed, and we don't see the need for a continued infusion of taxpayer cash into banks."


  • "Barney Frank has proposed a bill that would set aside $40 billion of the second tranche of TARP money for foreclosure relief efforts. The experience of the auto companies demonstrates that even if his legislation fails in Congress, he can take his case to Obama directly, and Obama can spend the TARP money however he wants."