Sunday’s [October 10] Washington Post (editorial section) has a piece “5 Myths about TARP.” Now, I generally like the Post’s “5 Myths . . . ” series. Except when there’s a clear ulterior motive and the mythbuster has an ax to grind. In this case, “5 Myths about TARP” is written by none other than Timothy Geithner, current Secretary of the Treasury and former president of the Federal Reserve Bank of New York. Not exactly an unbiased or critical source.
Geithner’s “5 Myths” are:
- The TARP cost taxpayers hundreds of billions of dollars.
- The TARP was a gift for Wall Street that did nothing for Main Street.
- The TARP was a quick fix for the market meltdown but left our financial system weak.
- The TARP worsened the concentration of the banking sector, leaving it more vulnerable to another crisis.
- The TARP was the centerpiece of a strategy by President Obama to assert more government control over the economy.
I won’t even critique Geithner’s article to cite its inconsistencies. (Well, OK, just one. He notes in Point 3 that “Of the 15 largest financial institutions before the crisis four are no longer independent entities” and in Point 4 that “It is true that the financial system is more concentrated today than it was before the crisis.” Yet Myth 4, inexplicably, is “The TARP worsened the concentration of the banking sector.”)
Most of us may not have the resume of Mr. Geithner. But I suspect we have some real-world experience and some up-close-and-personal knowledge that the Secretary of the Treasury/Former Federal Reserve Bank of New York president may not have. Plus the common sense to be able to separate myth from reality.
So, let’s add to the list of myths about TARP [Troubled Asset Relief Program]. Or–more appropriately–create our own “X Myths about TARP.” What myths did the honorable Mr. Geithner somehow overlook that really should have been included in a listing of myths about TARP?