After TARP: Banks Still Don't Really Care About You

What do you say to all our friends who feel that TARP was a success, citing that the majority of the loaned money has been paid back (and, possibly, a 10% return on our loans, which will presumably be offset by the outstanding billions)? You could try some of these, most of which involve the lack of lessons learned (thanks in part to the Fed discount window and getting to lie about using it) and the consolidation of the banking industry, which has changed very little about how it operates:

• “The political ‘success’ of TARP is an economic disaster for everyone except its immediate beneficiaries.”

• “Two and a half years after the bankruptcy of Lehman Brothers, the number of banks that are still facing serious financial problems continues to rise, and is now nearing the four digits.”

• “Neil M. Barofsky, who was TARP’s inspector general, says the program failed miserably in its attempt to purchase and modify mortgages to help homeowners avoid foreclosure. The big banks given TARP money didn’t increase lending as expected. And there were no strings attached to their bailouts to make them. TARP’s original goal was to prevent up to four million foreclosures, but it’s now estimated that fewer than 800,000 will be avoided as a result of TARP’s mortgage modification program.”