Time to Carp About TARP

Turn on the broken record player, my friend...that's right: we're talking bailouts.

The other day, Nick Schweitzer laid out a critique of Rep. Paul Ryan's bailout stances along lines of my earlier observations.

Nevertheless, regardless of any perceived inconsistencies, it was good to see that Ryan was clear in his opposition to spending the second half of the TARP funds. I think he's now cognizant of the discontent with support for bailouts.

Still...it was Ryan's vote back in the fall that mattered. As Nick hinted, the structure of the TARP authorization legislation provided for the automatic release of the second half of the funds unless both houses of Congress blocked it. Nick speculated that President Obama would veto a bicameral blocking vote - and thereby emasculating the House vote and releasing the funds anyway. But that's not the chief consideration.

Obama doesn't even have to get involved. Since the Senate failed to vote to block the TARP dispersal earlier, the House vote on Thursday was entirely symbolic:

The money will be released, nonetheless, because the Senate last week voted not to block the funds. That vote deprived the House's decision of any legal weight since the funds could only be blocked by a vote of both chambers of Congress.

Wily move, Congress, wily move. Smells like a base closing to me.

As one of my roommates noted, since the problem with the first half of TARP most observers cite is the failure to have a big enough one-time "cash explosion" hit the economy, why, if we stipulate that the government is going to spend the money (and I rather it didn't), doesn't it hold off on releasing the second half of TARP?

Why not roll the second half of TARP into the overall Obama Stimulus instead of trickling it out in the middle with little chance of effect based on what we've seen with the first half? The second half seems to have no guarantee of success alone, but it might have a marginally better chance of impact as part of a comprehensive lightning bolt to the nervous system (although, trust me, I question whether any bailout/stimulus actually has any guarantee of efficacy whatseover).