Reply #17: Senator Obama voted for TARP I and President Obama implemented TARP II

[Hart2008]

Obama certainly enacted the TARP program as U.S. Senator and continued it as president:

Rolling Out TARP II

Creating an unnecessarily subsidized market in toxic assets

Anthony Randazzo | March 27, 2009

The Treasury Department has created a bit of a conundrum for libertarians when it comes to the newly announced Jekyll and Hyde-like TARP II. On the one hand, the government is finally reaching out to the private sector through this initiative, recognizing the power of markets and price discovery as means to end the economic crisis. But on the other hand, the taxpayers are still taking up to 93 percent of the risk in this new venture. That’s hardly an equitable solution and it could end up costing incalculable billions.

Since the Troubled Asset Relief Program (TARP) bailout was passed last September the money has been used for a host of recovery initiatives. The first half was used largely to recapitalize the banks by buying up equity shares. The second half, TARP II, will be focused on the initial goal of the bailout: to get the deadly mortgage-backed securities and toxic assets off bank balance sheets.

These real estate loans and securities have been rebranded as “Legacy Assets.” They are essentially mortgages, subprime and other, abandoned or in foreclosure, leaving the bank holding the debt in the weak housing market. Because balance sheets are cluttered with unpaid loans, banks have limited the amount of credit they are willing to extend, part of the cause of the economic slow down.

TARP II will use $100 billion of the Congressionally approved money to create the Public-Private Investment Program (PPIP) , a plan to unite private capital with taxpayer dollars to buy up to $1 trillion of the Legacy Assets from banks, easing their debt levels, allowing credit to flow more freely.

Treasury Secretary Tim Geithner argues that creating a program like this will leverage the price discovery process of the free market to help find the right price to buy the Legacy Assets from banks, and is better than the government trying to value the toxic debt on their own.

http://reason.com/archives/2009/03/27/rolling-out-tarp-ii

At this point in time Obama owns the TARP program after administering it for almost three years now. Like the military occupations, it is yet another instance of Obama extending Bush administration policies to effect Bush's third term.

It’s little wonder that Rolling Stone writer William Greider, in a marvelously detailed article in late 2008, pointed out that Obama’s choice of Summers and other key economic advisers, including Treasury Secretary Timothy Geithner, seemed designed to sustain the failed economic policies of the Bush presidency — an administration that never saw the financial crisis coming in the first place.
The Summers appointment told me that the President had no earthly clue how this devastating financial crisis happened or how to reverse it.

Things only got worse after that. President Obama failed to resurrect the Glass-Steagall Act of 1933. He failed to include a public option in health care. He failed to assert his constitutional responsibility during the recent debt limit crisis. Unbelievably, he's failed to protect Social Security and Medicare. He extended the Bush tax cuts for the wealthy. He failed to push for cap-and-trade. And he failed to close Gitmo. I could go on, but I think you get the point. If anybody deserves a serious intraparty challenge, it's the current occupant of the White House.
In retrospect, it's really incredible that a Democrat of national stature and credibility hasn't entered this race — at least as of now.

http://en.wikinews.org/wiki/Wikinews_interviews_Darcy_Richardson,_Democratic_Party_presidential_challenger_to_Barack_Obama