Hooked on TARP: Today's Outrage
NEW YORK (
) -- There's no question that the Troubled Asset Relief Program is going to be extended into next year.
Some members of Congress may not like it, but the fact is the financial sector and by extension the economy are addicted to TARP. While
Congress will hold endless hearings about the banking bailout
(that's what Congresses do), the Treasury will win the day.
Let's face it, we can't pull back the $443.8 billion currently in the pockets of various financial firms without some serious withdrawal symptoms.
We have to bear in mind that the government needs time to unwind the multi-billion-dollar direct investments it made in companies like
AIG
(AIG) - Get Report
,
Citigroup
(C) - Get Report
,
Wells Fargo
(WFC) - Get Report
and
Bank of America
(BAC) - Get Report
. in a way that doesn't kill the financial stability and stock market recovery we have been seeing.
For every company like
Goldman Sachs
(GS) - Get Report
,
Morgan Stanley
(MS) - Get Report
and
JPMorgan
(JPM) - Get Report
that have repaid the government, there are hundreds of other banks that are still relying on taxpayer funds to shore up their accounts.
The politicians who are taking a stand against renewing TARP are a pretty small minority, with just 14 members of the House (12 Democrats and 2 Republicans) who
sent a letter to Treasury Secretary Tim Geithner
this week asking him to let TARP expire this year, according to the
Coloradoan
.
Over in the Senate, the anti-TARP forces appear a bit stronger with 40 senators (39 Republicans and 1 Democrat) signing a similar
last week,
Reuters reported.
They can afford to take a stand because they know that Geithner is going to get TARP renewed and they will never have to face the consequences of a sudden withdrawal of hundreds of billions of dollars from our financial system.
--Written by Glenn Hall in New York.
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Glenn Hall is the New York-based Editor in Chief of
TheStreet.com
. Previously, he served as deputy editor and chief innovation officer at
The Orange County Register
and as a news manager at
Bloomberg News
in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at
The Journal-Gazette
in Fort Wayne, Ind. His work also has been published in a variety of newspapers including
The Wall Street Journal
,
The New York Times
and
International Herald Tribune
. Hall received a bachelor's degree in journalism and political science from The Ohio State University and a certificate in project and program management from Boston University.
