During the financial meltdown of 2008, I reluctantly came out in support of the first bipartisan effort to buy up undervalued assets. I supported the effort as markets were imploding and people were at a loss on how to value the bizarre securities that came to dominate the market since the Securities Modernization Act of 2000. The first part of the bailout turned into the TARP fund.
I turned against the bail out once special interests started eying the crisis as a trough.
The first part of the bailout was actually a pretty clean bet. A lack of confidence meant securities were woefully undervalued. As new accounting standards forced banks to mark to market, many banks were facing insolvency despite the fact that the long term prospects of their portfolios looked okay.
The first wave of the bailout in the summer of 2008 had bipartisan support and was a solid financial decision.
I admit, I was a bit ticked off during Obama's campaign speech for Martha Coakley which tried to score partisan points for one of the few bipartisan acts we've seen in Congress in the last several years.
The fact that loans made in 2008 are being repaid is a sign that the lenders did a good job lending.
The money spent on the stimulus is not being repaid. For example, the cash for clunkers was cash, given for clunkers. It will not be repaid.
The timing of these loans is important. The US Government started working a little bit better when it had a mixed Congress.
The current campaign is about maintaining a Democratic Super Majority. If Coakley wins, the Democrats will retain a super majority through the summer.
Just as when the Republicans held both houses and presidency, every bill passed be the idea good or bad. So the timing of the loan is a critical issue in the Ma elections. The loans were part of a bipartisan effort. The stimulus spending by the super majority that was supposed to save or create jobs did not appear to save or create jobs.
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