Most politicians send press releases to news organizations touting their accomplishments to make themselves look good to the voters back home.
Lately, Sen. John Thune has been sending us news about his failures in Washington – to um, make himself look good to the voters back home.
Thune would like to see the Troubled Asset Relief Program (TARP) program go away. In his words, "The original purpose of TARP no longer exists and it is time to shut down this program."
But Congress won't approve his legislation to end TARP. And he brags about that constantly.
Unless you've been living in a bubble, you'll recall that TARP had its beginning in the fall of 2008, at the height of the presidential election, about two months before President Obama was selected by American voters to be the new chief executive starting in January 2009.
You'll also recall that, during that time period, markets had crashed and credit had ground to a halt. So then-Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Mernanke met with senior legislators in Congress, and informed them that if they didn't inject $700 billion of taxpayer money into the U.S. banking system, the economy would collapse.
So, Congress followed their advice. They came up with $700 billion. And TARP was created.
And, Thune voted for it.
Here's what he said in a press release, issued the fall of 2008, after Congress created TARP.
"It would have been easy to do the `politically popular' thing and vote against this bill, but for me it would not have been the responsible thing to do," Thune said. "I am frustrated that the government is being forced into this position, but the authority this bill provides is temporary. It also ensures strong oversight and strong taxpayer protections and it prevents Wall Street executives from walking away from their failed companies with golden parachutes."
So, in other words, TARP, a program that Thune now says has lost its purpose, is a mess that he helped create.
If you want to call it a mess, like Thune constantly has this year, never mentioning his 2008 vote that helped get the TARP ball rolling.
Let's face it. Thune did the right thing back then – back when our economy was pretty much teetering on the brink. Something had to be done. TARP was the best quick response that could come from Congress, a body that, it seems, hasn't really accomplished much of anything else since.
But his work for us – for the nation, really – isn't finished, and Thune isn't accomplishing anything but making himself look good at home with his constant railings against the baby he helped birth nearly two years ago.
It's time for the senator to shift his attention from TARP – we get it John, you don't like it, and you've gotten your point across in recent news stories. Time to turn the page.
We suggest the senator start crafting legislation that actually addresses the root cause of the economic collapse that made TARP necessary.
Elizabeth Warren, Harvard Law professor and economic thinker, who was appointed to chair the five-person Congressional oversight committee for TARP, noted in a recent Wall Street Journal opinion piece that for most of the past two decades, many Americans trusted the banking industry– not necessarily to be moral exemplars, but they trusted that the banks were basically doing what was right for customers and for the economy.
Then in 2007-2008 that mood abruptly reversed, as it became apparent that unscrupulous mortgage lenders, the Wall Street banks that backed them, and the credit rating agencies had been ripping off mortgage borrowers on the one hand and investors on the other.
Warren notes: "The big banks face a choice. They can agree to sensible reforms that protect consumers and rein in the excesses of the past decades. Or they can simply decide to screw customers, but do it openly this time, since they have so much market share it almost doesn't matter what customers think. How else do you explain, say, Citigroup's concocting a new credit card "feature" explicitly to get around a new requirement of the Credit CARD Act? Or Jamie Dimon saying that financial crises are something to be expected every five to seven years, so we should just get over it?"
In January, the Congressional Oversight Panel that Warren chairs reported that it has found "that the repayment of TARP assistance represents only the first stage of exiting TARP. Even after repayments are complete, Treasury will hold a massive pool of assets, worth hundreds of billions of dollars, for several years to come. Managing these assets will present extraordinary challenges. Furthermore, any effective exit strategy must address the unwinding of the implicit guarantee created by TARP."
So, it's time for Thune to move on. The legislation he so proudly boasts about, calling for essentially the end of TARP authority and requiring the federal government to sell all the ownership interests in private companies that it has acquired through TARP, is just plain silly.
It would be nice if he, instead, begins focusing on reforms that would at least give us a sliver of hope that once this nation gets back on its feet economically, we will never face an unregulated banking industry that eventually will bring us to the brink of disaster again.