It’s called TARP, which stands for Troubled Assets Recovery Plan. “Troubled Assets” is the euphemistic label given to real estate that was offered to people without sufficient financial capabilities to own the size home they bought due to liberal policies hoisted on Fannie Mae and Freddie Mac by Rep Barney Frank, Sen Chris Dodd and President Clinton. TARP is the plan to fix their historically massive mistakes.

These same liberal forces in DC protected this nightmarish plan to hand out expensive homes to people who could never of qualified to take on the responsibility of the size homes they played house in. There were many efforts to reign in the madness, or at least set out trip wires in the form of reporting on the experiment. But to no avail.

When the real estate market bubble burst, those who could only weather the best of the best of the best of times as home owners started to default. The liberal DC experiment came crashing down so hard it shattered the foundations of our banking system – and the world’s. That is how big a mess the DC liberals caused with their out of control experiment and resistance to oversight.

Is it any wonder the three Democrats have personal and ties  financial  to Fannie Mae, Freddie Mac, etc ties (many ties much deeper  than just donations from cronies)?

Now a Congressional oversight panel inside the Democrat controlled Congress is concerned about TARP – very concerned:

April 8 (Bloomberg) — A congressional panel overseeing the U.S. financial rescue suggested that getting rid of top executives and liquidating problem banks may be a better way to solve the economic crisis.

The Congressional Oversight Panel, in a report released yesterday, also said the Treasury may be relying on too rosy an economic scenario to guide its $700 billion bailout, and declared that the success of the program after six months is “mixed.” Three of the group’s members disagreed with at least some of the findings.

“All successful efforts to address bank crises have involved the combination of moving aside failed management and getting control of the process of valuing bank balance sheets,” the panel, headed by Harvard Law School Professor Elizabeth Warren, said in its report.

Two of the dissenters were the two GOP members. Their primary concern seems to be nationalization and political posturing. One article calls out this part of the dissention:

Two of the panel members, New York State Superintendent of Banks Richard Neiman and former New Hampshire Senator John Sununu, issued separate findings.

“We are concerned that the prominence of alternate approaches presented in the report, particularly reorganization through nationalization, could incorrectly imply both that the banking system is insolvent and that the new administration does not have a workable plan,” the two wrote.

Why are these two worried this damning congressional oversight report “could incorrectly imply … the new administration does not have a workable plan“? What if the plan is unworkable? What if the Obama administration is throwing away hard earned and needed tax payer money in an recovery plan as doomed as the liberal home owner policies themselves were? Both came out of the democratic halls of DC!

I, like many, think these overzealous lenders who gorged themselves at the trough of this liberal experiment gone mad deserve the punishment of the short sighted, profit driven decisions. It is not the first time, or the last time, short sighted focus on profits destroyed the long term viability of companies. They should fail, and structured failures that minimize the impacts seems better than trying to prop up institutions that cannot stand on their own, and may not for years.

It just happens that this time the government was an enabling partner and hooked hundreds of greedy people who happily lined the campaign coffers of liberal policy makers in return for the chance to fleece the country. With the government’s deep pockets in the background, this debacle grew to a massive scale of shortsighted greed, which had the usual effect – just on a scale never seen before.

This is why we need the government out of our economy, so it doesn’t exaggerate the business cycle and wipe out half the wealth and savings like this latest screw up out of DC did. On this point I agree technically with the dissenters – the hand of the Feds is rarely (outside of law enforcement, space exploration and national defense) conducive to success.

The full report is here and I plan to read it more and comment through out the day. It seems like a worthy subject for us Americans to debate long and hard. And I think it is asking the right questions:

With this report, the Congressional Oversight Panel examines Treasury’s current strategy and evaluates the progress it has achieved thus far. This report returns the Panel’s inquiry to a central question raised in its first report: What is Treasury’s strategy?

We have not seen any real answers to this yet, and we sure as hell have not been seeing any measures of performance, the metrics which would indicate how the taxpayer investments are going. We are seeing lots of heads roll and the Dems playing up their fantasy role as defenders of the people, as they clean up the mess these Walter Mitty types made in the first place. I am hoping to find some actual measurements of the success or failure in this report – but since the results are mixed I am expecting to find a lot more failure than success in the details.

“Mixed” is the term DC uses when its plans don’t work. The economic crisis is what happens when their plans and experiments run amok, out of control in spectacular failure. “Mixed” is a lesser screw up – but it could be a step on a path to more crisis as well.

Addendum: Yeah, this is going to be one bleak report since the very first paragraphs have some stunners in them:

In addition to drawing on the $700 billion allocated to Treasury under the EESA, economic stabilization efforts have depended heavily on the use of the Federal Reserve Board’s balance sheet. This approach has permitted Treasury to leverage TARP funds well beyond the funds appropriated by Congress. Thus, while Treasury has spent or committed $590.4 billion of TARP funds, according to Panel estimates, the Federal Reserve Board has expanded its balance sheet by more than $1.5 trillion in loans and purchases of government-sponsored enterprise (GSE) securities. The total value of all direct spending, loans and guarantees provided to date in conjunction with the federal government’s financial stability efforts (including those of the Federal Deposit Insurance Corporation (FDIC) as well as Treasury and the Federal Reserve Board) now exceeds $4 trillion.

In half a year DC has spent nearly have the total debt this nation has accrued over its 200+ year lifetime. Not all of this is shown in the Federal Budgets that come out of Congress and the White House, which show a $2 deficit this year:

In other words, under full accounting without hiding any data, America has already spent twice what the administration has stated publicly it plans to spend this entire year – deficit wise. At this burn rate by the end of the year it will be $8 trillion, not $2 trillion. That is what we call shading the truth.

Yeah, this is ‘mixed’ all right.

Tags: Dodd, Fannie Mae, Franks, Freddie Mac, TARP