krebscycle

First published on DailyKos. (and if you never had the privilege of reading Bob Swern’s hysterical sky-is-falling articles in DailyKos you won’t get the paragraph starting with “Now I’ve previously”.)

Neil Barofsky’s absurd self-justifying attack piece in the New York Times is built on an atrociously dishonest sleight of hand in which Democrats are blamed for Republican misdeeds. In paragraph seven we get

Treasury, however, provided the money to banks with no effective policy or effort to compel the extension of credit

and in paragraph eight we get

Meanwhile, the goal of helping struggling homeowners was shelved until February 2009,

That’s a funny date, “February 2009” – that’s the first full month in office of the Obama administration.So the money was handed out to Wall Street banks by Bush and Paulson “with no effective policy”, but Bush and Paulson’s names don’t appear in Barofsky’s article. If you read the article without sufficient background or you wanted to follow the Republican narrative for some reason, you could conclude that Geithner and Obama tossed around all that money. But in early February 2009, nearly $300billion had already been committed from TARP. Here’s a table from Barofsky’s own reportof the situation January 23 2009. What Bush and Paulson left for Obama and Geithner.

CPP $194.2 billion ($1.2 billion additional informally committed)
SSFI (AIG) $40 billion
TIP (Citigroup and Bank of America) $40 billion
AGP (Citigroup and Bank of America) $5 billion ($7.5 billion additional announced for Bank of America)
AIFP (GM, Chrysler, financing arms) $20.8 billion

Very few believed that any of this money would come back and the economy was still in a tailspin with massive layoffs taking place on a daily basis and the end of the world being confidently announced all over the place.

Now I’ve previously documented the curious eagerness to believe Republican spin by so-called “progressives” in a number of diaries such as

http://www.dailykos.com/story/2011/03/29/960141/-Howprogressive-economics-works-for-the-rich
http://www.dailykos.com/story/2011/03/22/958993/-Treasury-to-sell-worthless-mortgage-bonds-at-profit-(update-2)
http://www.dailykos.com/story/2011/02/24/948859/-Can-Matt-Taibbi-really-be-that-naive
and
http://www.dailykos.com/story/2011/01/22/938104/-Left-economists-are-wrong-about-housing
and
http://www.thepeoplesview.net/2011/03/tim-geithner-continues-to-uh-make-money.html

but uncritically accepting Luntz’s attempt to blame Obama for Bush’s TARP failure is evidence of a whole new level of dizzying spin and confusion. We reached tipping point for the industry that manufactures supposedly left-wing criticism of the Obama administration out of right wing blather.

A year later Barofsky’s report has a very different table. The numbers in parenthesis are repayments. What we see is $121.9 billion back from the generic Wall Street bailout (CPP), $40B back from TIP (BOA and Citi) , and huge new outlays on saving the auto industry (AIFP) plus a new program that went into the consumer/student/auto loan business.

Cpp total Gross $204.9 29.3% ($121.9) $83.0
ssfi total $69.8 10.0% $— $69.8
tip total $40.0 5.7% ($40.0)
aGp total $5.0 0.7% ($5.0)
talf total $30.0 4.3% $— $30.0
aifp total $80.7 11.6% ($2.5) $78.2
assp total $3.5 0.5% ($0.1) $3.4
ppip total $30.0 4.3% $— $30.0
mha total $35.5 5.1% $— $35.5
tarp expenditures subtotal $500.1 71.6%
tarp repayments/reductions in exposure subtotal ($170.2)
tarp outstanding subtotal $330.0

What you won’t see in this report, but can find if you look at the detailed TARP data is that during that year billions of dollars to banks went to small banks, union banks, coops, and development agencies. This is one of the most stunning policy turn arounds in American history. And a year later, we have the following admission

On November 29, 2010, CBO issued an updated TARP cost estimate based on its evaluation as of November 18, 2010. 18 CBO estimated that the ultimate cost of TARP will be $25 billion.