Dave Weigel notices some flip-flopping from presumed 2012 candidate for President Mitt Romney:
Mitt Romney at the Values Voter Summit this morning:
When government is trying to take over health care, buying car companies, bailing out banks, and giving half the White House staff the title of czar – we have every good reason to be alarmed and to speak our mind!
Romney at the Conservative Political Action Conference in February:
I know we didn’t all agree on TARP. I believe that it was necessary to prevent a cascade of bank collapses. For free markets to work, there has to be a currency and a functioning financial system.
Yet another reason not to support Romney.
September 20th, 2009 at 5:45 pm
When 2012 rolls around we will need a whole new crop of potential candidates for the Republicans or else we will once again be in trouble. If the Republicans nominate another candidate like McCain, Obama may just get reelected.
It is time to stop sending in the clowns.
September 20th, 2009 at 6:12 pm
Get over it….
You need to walk and chew gum on this one.
Nobody who believes more in free markets, capitalism and competition than I do…..but Romney is 100% right, TARP or something like it was needed to stand behind our currency, prevent runs on banks and a catacyclismic collapse that would have been Great Depression II. I thought it brilliant that Benanke and Paulson made the good banks take TARP as well as the bad banks. It would have been ironic watching folks with their mesh and canvas Whole Foods bags standing outside of Citi branches, but it wouldn’t have been any prettier than the GD.
And ya I agree that it was unnecessary and disgusting (indeed, outright corrupt) to use TARP to save Chrysler for the Italians and to rescue GM for God knows who or what. And Citi and its stockholders, its bondholders and its management ought to be put out of commission for TARP plus.
Now the thing to do is de-TARP as fast as possible.
A necessary function of the Government is supporting the currency on which free market enterprise relies. Get over what TARP did and now get on board with policy-neutral Milton Friedmanesque management of the money supply which gets politics out of the mix and grows currency at a consistent sustainable 3 to 5 percent rate so it supports and does not act as a break on economic growth.
And put Glass Steagal or something like it back in place so we can limit the size and fence off the part of the banking system that is standing behind the currency. Then Goldman and the other investment banks survivors can go back to the wild, wild West of true capitalism.
September 20th, 2009 at 11:08 pm
[...] he just can’t wait to start campaigning, as shown by this interesting pair of quotes from Below the Beltway. Back in February (before all the tea baggers started making so much noise), he said at the [...]
September 21st, 2009 at 9:07 am
You’ve GOT to be kidding. No one who understands “free markets, capitalism and competition” would support the TARP. You sound off with the ridiculous gloom and doom scenario that Bernanke and Paulson spewed forth when they panicked last September. Rather than save us from a panic, there is a stronger argument that the TARP shenanigans caused a panic in the market (see John Taylor’s book on this) with B&P’s policy zigs and zags. There was no evidence presented by B&P regarding their pessimistic scenario of a pending Depression. Look at the quotes and it was only a few months earlier that B&P were saying the subprime problems would never spill over into the broader economy. Why listen to two people who were so consistently wrong over the course of the recession?
TARP was one of the biggest interventions in “free markets, capitalism and competition” in the past century. The idea that you have to hand out $100s of billions of public funds primarily to “viable” institutions, which was the goal of TARP, was an unprecedented move in the direction of government credit allocation that will no doubt be repeated by a future administration when they also panic at some point in the future. One of the most outrageous acts was the strong-arming of the largest nine banks to take TARP funding, a move you somehow conclude was “brilliant.” Two possible results flowed from TARP and it is still up in the air which one is true based on the historical data: 1) The TARP money was a complete waste because the banks never turned around to lend it; 2) the banks did lend it and we had government extorted lending just as the economy tanked last fall.
Why do you think the TARP money led to giving money to the automakers? Because they never articulated a clear standard for the use of the money and you saw all that is bad in Washington flow from having a pot full of money made available: hastily-crafted legislation, pork-barrel politics, fear-mongering, unintended consequences, and a feeding frenzy for lobbyists and members of Congress alike. If that is how you define as “necessary” then I will have to disagree with you.
I agree with Doug, that his support of TARP is yet another reason NOT to support Romney. As far as I am concerned he is a Bush clone as I cannot remember a case where he had a serious policy disagreement with GW 43 on the campaign trail in 2008. Maybe you have side by side pictures in your bedroom of Romney and GW Bush, but I certainly don’t. As for your final point, we don’t need to limit the size of banks, we just need to let them fail when they screw up and also not force them to lend in the midst of a severe, government-induced recession.
September 22nd, 2009 at 11:33 am
You and I may be in agreement on most issues.
Vern I have no love for Romney or Bush.
There may be lots of good reasons for not liking Romney, but they are not to be found in the quoted statements.
On a personal level, I did have a father who turned 29 years old in North Dakota in 1929 and I understand what happens when the banking system fails. And having studied the issues for close to 40 years I understand a thing or two about how the banking system does and does not work. The only legitimate justification for TARP was saving the system from collapse, your quite accurate characterizations of the abuse of TARP and the horrible precendents it sets notwithstanding.
As far as understanding the crisis I did not rely on and was months ahead of B&P. When I told people the meltdown was almost invevitable starting in mid-2007 and that the Fed was pushing a string eyes rolled and mouths chuckled. It wasn’t until getting to the idea of re-capitalizing the banks that B&P fully got it.
Since I was short banking stocks at the time TARP was enacted, personally I would have profited immensely if TARP went down. I would be wealthy; others would be eating dirt. But I didn’t want that outcome then and I am pleased it didn’t happen.
Sure the root causes for the crisis addressed by TARP are dozens of bumbling, ill-conceived and bubble-inducing government interventions, by the FED, the Congress, the Administration, regulators, and others.
But like it or not the government has to stand behind the medium of exchange; there is no substitute. If the banking system collapses the medium of exchange becomes the enemy of exchange and we all pay an enormous price.
September 22nd, 2009 at 11:41 am
Scuse me that’s a typo — my dad was 20 years old in 1929.