Hard-money conservatives like Larry Kudlow who think Gov. Mitt Romney is actually serious about maintaining the value of the dollar ought to remember that Romney argued in October 2011 that the TARP bailout was designed to keep the currency worth something:
According to Governor Romney, the $700 billion Wall Street rescue package "was designed to keep not just a collapse of individual banking institutions, but to keep the entire currency of the country worth something."
Noting could be further from the truth and Romney knows it.
TARP was not sold as a program to prop-up the dollar; it was sold as a means of keeping credit markets liquid, to keep banks lending to business, so businesses would keep people employed.
Not surprisingly, from that perspective TARP has been a spectacular failure -- because as soon as Congress granted then-Treasury Secretary Henry Paulson a blank check for $700 billion (along with near-dictatorial powers over the American financial services industry and de facto control over the U.S. economy), something changed.
Suddenly, instead of being a program to move illiquid mortgage-backed securities off the books of banks, TARP became a no-strings-attached cash infusion to favored financial institutions and corporations.
Among the insiders who received the no-strings-attached cash were Goldman Sachs Group Inc, Deutsche Bank AG, Merrill Lynch, Societe Generale, Calyon, Barclays Plc, Rabobank, Danske, HSBC, Royal Bank of Scotland, Banco Santander, Morgan Stanley, Wachovia, Bank of America, and Lloyds Banking Group – that’s what Romney and Cain were defending.
If borrowing money to spend on circumventing the failure necessary to the proper operation of free markets props up the value of the dollar, it hasn't worked very well.
Since the (first!) bailout of Chrysler signed into law by Jimmy Carter in January 1980 you now need $2.73 to buy what $1.00 did then.
Way to go Brownie!
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| a little hurricane humor there |
