Brad Delong writes:
Thus I do not understand why officials from the Fed and the Treasury keep telling me that the U.S. couldn't or shouldn't have profited immensely from its TARP and other loans to banksDelong is writing about Fed loans to Morgan-Stanley in 2008. In 2008, George W. Bush was President and Henry Paulson was Secretary of the Treasury and both of them were incompetent and in favor of massive public subsidy of the rich. President Obama took the oath of office in January 2009. So the officials from the Fed and Treasury now are speaking of what was done then. Please recall Paulson's original TARP plan had no restrictions, no requirement for payback and well into the first year of the Obama Administration, "liberal" pundits like Duncan Black were confidently explaining that the public would never recover TARP loans (and they were flat wrong). Please recall that the largest investment of TARP funds under President Obama did not go to Wall Street Banks, but went to the auto industry. So the number one reason why the crisis occurred, why it was so devastating, and why the initial response was to throw money at banks is that the Republicans controlled the White House. Obviously, Delong knows this, but if you didn't know it, and read his post, what would you think?