“It’s time to apply the same rules from top to bottom: No bailouts, no handouts and no cop-outs. An America built to last insists on responsibility from everybody,” - Obama in his State of the Union address
Guy T. Saperstein, Alternet - Obama did not simply continue the bank bail-out, he, more than Bush, was the main reason TARP passed Congress, as Congress first rejected TARP, then passed it by a narrow margin when Obama, then far in the lead of McCain in the Presidential race, endorsed it and actively campaigned for its passage. It was the first, but not the last, example of Obama promoting a Republican plan....
What TARP did was shift losses for toxic investments in poorly collateralized debts (mostly mortgages) to taxpayers. At the same time the private equity market was paying 20 cents on the dollar for toxic assets, Obama’s advisor and later Treasury Secretary, Tim Geithner, was counseling Obama to agree to pay 100 cents on the dollar for the same junk, which he did. If you read Nobel Prize winning economist Joseph Stiglitz’ book, “Freefall,” you will see that Obama did this passively and reflexively, without any serious consideration of alternatives. Not only did the federal government overpay and over-guarantee bank obligations, it imposed no conditions on the banks to loan money to Main Street.
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