As a bailout proponent, I confess, the only statement I’ve heard over the past six weeks asserting that the original $700 billion for TARP has done tangible good came from Paulson himself. Like Megan McArdle, I hoped it would work as a firewall against future bailouts; clearly it didn’t. I justify it to myself on grounds that things could have been disastrously worse if it hadn’t passed, but that’s no different really from WaPo insisting that Obama will save millions of jobs even if he doesn’t actually create any. How do you measure?
The “good news” of the Citigroup bailout, such as it is, is that this one’s guaranteed to do some good only because the consequences of Citi failing are so enormous. The bad news? It won’t end at Citi, as Cramer observes about halfway through the second clip below. In fact, at this point, I’d consider it a moral victory if this bailout ensures that Citi itself doesn’t need further rescuing in the near future. All I want as a taxpayer is the answer to the following question: How much to fix everything versus how much to let everything collapse? I know they can’t give me a definitive answer, but give me some answer with some measure of assurance. If the apocalypse is inevitable, let it come; just stop burning money futilely trying to fend it off. As it is, these bailouts appear to be achieving nothing more than buoying up the Dow for a day or two, followed by another week of precipitous decline.
Exit question: It’s a staple among talking heads that Bush should do more to integrate Obama’s team, follow Obama’s plan, etc. What, precisely, has he neglected to do that’s retarded the transition to Geithner and company? Aside from the auto bailout, which is hung up in Congress, there are no major disagreements between he and The One that I know of. Did I miss the memo about Obama being adamantly opposed to rescuing Citi?
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