Why not oppose TARP?

Alex J., a loyal MR reader, asks:

How come no prominent politicians carved out the underutilized political resource of opposing TARP?

The Democrats thought they will get their hands on some of the money (true) plus they were happy to see a Republican President take part of the fall.

As for the other party, how many prominent Republican politicians are there?  John McCain thought, rightly or wrongly, that he was acting in the national interest by supporting this part of the bailout.  McCain supporters were scared away from challenging him on that issue.  So only some of the more radical and less recognized Republicans opposed the bailout.  Sooner or later a few of them will become prominent and then the premise of this question will no longer hold.

Comments

How come no prominent politicians carved out the underutilized political resource of opposing TARP?"

For the same reason that people hate Congress but love their Congressman.

Most people are idiots, and most politicians understand this.

The rest all follows naturally.

The Democrats did not believe TARP was in the national interest and only voted for it to get the money?

Steve

erg... sorry for that link. Here is the real link:

http://www.washingtontimes.com/news/2008/dec/30/rnc-pushes-unprecedented-criticism-of-bailouts/print/

I think there's an obvious answer.

Under TARP, Mr Paulson gets money to spend basically as he sees fit.

Suppose you are a Congressman who has vocally opposed TARP. Now, when it comes time for Mr Paulson to allocate the funds, whose district do you think will come up short? TARP is structured in such a way that its passage is guaranteed. It is pretty overt vote-buying.

Don't forget that FDR did the same thing with New Deal money. It's one of the oldest political tricks in the book.

Many prominent conservatives opposed it, such as Mike Pence. That the conservatives are not prominent says all you need to know about the GOP in recent years.

I suspect the failure to oppose has simpler (and less malicious) grounds than proposed above. If you fail to support TARP, and the economy tanks really hard, you'll be forever tarred as having stood by while the roof collapsed. If you supported TARP and the economy tanks anyway, at least you'll have tried your best.

In a crisis, if you want to keep the respect of your fellow human beings, doing nothing is never an option.

Which, admittedly, makes it tough when the best option *is* doing nothing.

Is doing nothing the best option? Do we let massive destruction of the finacial system take place? And bear the associated destruction? I do not know. My gut says it is a damned if you do (to much state involvement in business) damned if you don't. (fascism/fanatacism/civil madness).

I think we will never know what is the real answer, because we are all human and doing nothing while others suffer is never an option. At least that is what my Mom had me beleive.

I, too, am baffled by John McCain's failure to recognize TARP for the disaster that it is.

I guess he used all his brain energy coming up with his VP selection.

During the election, one can clearly determine the point at which McCain's campaign went into it's final decline- it was immediately following his "return to Washington"- a return in which he ultimately voted for the bailout in the Senate. This was his missed opportunity.

Maybe the politicians all read MR and so supported the bailout? (A low blow? You decide.)

//Maybe the politicians all read MR and so supported the bailout? (A low blow? You decide.)//

Is someone jealous?

Also, ah, Bob, I am a little confused by your comment - which is surprising, because it's usually cake to sift through the not at all cryptic essays you generally post in the comment sections. Still, I am admittedly confused, if only just this once: I don't recall either blogger of MR to have ever been a huge fan of TARP and the way it was implemented. Am I missing something?

Of course, it is well known that you are always maddeningly precise and dead-on in your analysis of whatever is written on this or any other site besides your own, and your peevishly coherent disquisitions always clear it up straight away. So if you would, do clear it up. I think I speak for every MR reader when I say, with the utmost sincerity possible, that "We are all dying to hear more from Bob Murphy." Thanks.

Tim wrote:

Also, ah, Bob, I am a little confused by your comment - which is surprising, because it's usually cake to sift through the not at all cryptic essays you generally post in the comment sections. Still, I am admittedly confused, if only just this once: I don't recall either blogger of MR to have ever been a huge fan of TARP and the way it was implemented. Am I missing something?

Yes, you're missing the post where Tyler responds to a reader who asked if Tyler regretted his support for the bailout, and Tyler explicitly says no. Here it is.

Since you're a fan of my mini-essays, I encourage you to read the linked thread. Between us, I think I nailed Tyler pretty good at the time, since this post occurred just AFTER Paulson admitted he basically lied to Congress when asking for the TARP money.

Social Europe has far less stringent content controls

Except when it comes to what videogames can be sold, or how violent (or hardcore porn) can be sold. Or even when it comes to what can be broadcast over subscription cable services. The less stringent content controls only apply in one narrow sense-- over the air broadcasting. There are quite a few videogames and other media that cannot be sold, purchased, or broadcasted in any form in many countries in Europe.

I think it's somewhat an open question whether having a walled garden with more stringent controls is worth the trade off of many fewer content restrictions on privately sold and purchased media.

Bob,
I recall that post. And your comment. All considerations of light humor aside, I guess what I'm saying is there is a difference between blissful admiration for TARP and support for TARP. Surely even you must admit this?

And I do enjoy your less bombastic "mini-essays." Generally informative.

Jeff,
Most economists probably realize that politicians bent on, say, reforming health care are going to reform health care. No matter what the economists say. Best try to get a voice in there for the sensible way to do it, if it's going to be done (because ultimately, they base what they do on personal considerations, which more often that not are manifested in expected constituent reaction, not the opinions of economists).

That doesn't mean Austrians like Mr. Murphy should be quiet; some good opposition is necessary, and I'll admit, at least Bob is pretty good about explaining his critiques. But instead of all free-market minded economists opposing these things (TARP, for example) all the time on the grounds they won't work (remember, politicians don't always care if this is the case or not), don't you think it's beneficial to have some libertarian-minded economists willing to compromise? I mean, if it's gonna be done, it's gonna be done; it's better to have a few free-market economists in the argument, instead of being ostracized by outright opposition to something that's going to happen anyway, don't you think?

Only a nationally prominent Republican politician not tied to the McCain campaign would have maximum incentive to oppose TARP. He did.

Superheater,

De Tocqueville is wonderful reading, but suggesting that any prevention of a STATE RECOGNIZED institution that is denied to any group id CONSENTING adults seems more like fascism than liberty..If the STATE refuses to recognize ANY marriage then we can talk...I am all for that...but suggesting that a gay marriage is somehow akin to anarchy and unlimited personal license.

And abortion is really a comment about when do believe life begins...I am not a femnazi, but was dumb enough in college to get my girlfriend pregnant and we decided after a long and difficult time that the best route was to abort the pregnancy (very early 6 weeks). It was not an easy decision especially for an irish catholic couple...but it was the proper choice for us at the time...if the morning after pill was available at the time we would have been all over i...

I find that most people that oppose abortion are older white males who do not understand the difficulty of the situation....

Interestingly, both of these are really question of philosophy and morals...

I notice that you did not defend RNC control of speech and illegal imprisonment of free individuals....

Steve:

It was a joke suggesting that once we get to that point, our government will be smaller...it will be just the military....not logic...a joke

Superheater,

Thank you for the rhetoric. It was great. We obviously disagree, about a great many things...
And the relationship went fine, and ended when it should have ended three years later after college when we were in different parts of the country....sorry to disappoint you. Also, my personal relationship with my faith I do not ask for affirmation or justification just forgiveness...

And the definition of a gay relationship as immoral is a purely personal point of view, and has nothing to do with liberty or freedom, but choice...

And why is that whenever someone who completely tows an ideological line feels that trying to belittle another is the most appropriate form of public discourse? Ideology is dangerous...just ask those that live under the the Taliban or in Iran...

I agree, I should be able to choose where I educate my children, and how I educate my children, how and if I decide to join a Union....just like I should be able to decide to marry another person of the same sex, or terminate an early pregnancy.

Phil,

Enjoyed your reply. I DO Understand that there are limits on Personal Decisions, is the 100mph argument. I think the philosophical difference comes from the assumption that the abortion was us imposing our will upon a sentient other which I agree is wrong. I just do not feel that the fetus is a sentient other.

And I did not feel belittled, the original statement was just a BOLD statement about how ANY political group suggest they are for a position of hands off, deregulation anything goes for corporations, but command and control of the individual. Obviously it is not black and white as the initial comment suggests..IE there are limits on personal choice that are very dependent on cultural norms that have been passed down.. Just because there are different social norms does not make one right or wrong.

Some things are obviously wrong...killing another human, maybe even killing an animal because we are exerting control over another sentient being.

In that context, I do not see how gay marriage, or abortion, are personal choices akin to choices that deliberately endanger those around me, ie 100MPH down the freeway...

Tyler, you really DON'T understand politics, right? I mean, it's not strange (you're sort of a libertarian which means you are alergic to real political power) but it's still surprising. Where supporters or opposers came from geographically, whether they were up for reelection or not, were their seats safe or not, what did the polls said the public thought, what the "bases" of their parties thought, etc, all of that doesn't enter your considerations at all.

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