United Liberty

Bill Issac, former head of the FDIC, says TARP made bad situation worse:

The problems bedeviling banks today could have been a lot less damaging, too, Isaac said, if not for the government’s response, which he said promoted a crisis mentality with public statements and inconsistent policies.

Isaac ripped the federal Troubled Asset Relief Program, which allowed the purchase of up to $700 billion in mortgages and other toxic loans.

“I still believe it was a horribly bad idea,” he said.

Isaac criticized the inconsistent treatment of troubled financial institutions.

“We handled one transaction after another in an ad hoc fashion without giving people any sense that anybody was in charge and knew what they were doing,” he said.

Some banks were bailed out, he noted, while others were allowed to fail.

Not only did TARP allow the government to pick winners and losers, which isn’t new territory, it is going to lead to more bailouts in the future, more housing bubbles, because Congress, the President and the Federal Reserve have not figured that they are what got us here. It wasn’t the free-markets or capitalism, it was constant government intervention and an entitlement mentality…that every deserves the “American dream” without really doing anything to earn it.

That is why the past is the present and the future.