It is wonderful to watch boobs look back at history. It takes great skill to examine details and miss the obvious.

The Congressional Oversight Panel which is reviewing how well TARP money was spent by the Treasury says taxpayers got a raw deal.

According to Bloomberg, the panel says that the deficit between what Treasury invested and what it got was about $78 billion. The news service reports “‘From day one, it’s been apparent that Treasury’s interest leaned more favorably toward that of the bank’s, with taxpayers as simply an afterthought,’ said Representative Scott Garrett.” It is the kind of logic that the public should expect from a Congressman from New Jersey, “The Garden State.”

Two things stand out about the $78 billion figure. The first is that no one knows what the Treasury got for TARP money. The value may not be evident for years and will be based on the worth of the banks which got the money and their underlying assets.

The other and more important issue is what would have happened if the banking system had collapsed for lack of TARP funds. It is easy to forget that the bill to create the fund was rushed though Congress because of fear that the credit crisis was about to cause irreparable harm to the financial system. Subsequent developments at Citigroup (A) and Bank of America (BAC) would tend to support that point of view.

The money that the Treasury put into the banking system is not just valuable for what it bought the government. It is valuable for what it saved taxpayers if circumstances had gotten much worse.

Douglas A. McIntyre

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