Quote:
Originally Posted by bigearl
As I read this, what I get out of it is that:
*BMW needed a loan.
*Banks WERE NOT lending because of the banking crisis (not the auto crisis, the banking crisis).
*BMW could get a loan under normal circumstances, but lenders weren't lending period.
*Feds set up a funding source to assist with large loans while they worked the banking crisis out.
I don't see this as the Feds helping out BMW, I see this as the Feds standing in for banks because the banks were in such trouble. I'd agree under normal circumstances the funding shouldn't be this way- this ship was sinking though and the feds were just blowing up life rafts as quick as they could.
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The Fed is doing nothing but hurting the economy. Even if you assume the Fed's plan, which, by the way, is pretty confident in itself to actually believe any person or entity can plan any economy, is "successful," then you must also realize it's setting itself up for bigger failures in the future. Hazlitt said it best in
Economics in One Lesson, "Does not the spendthrift know that after his glorious fling he only creates more future debt and poverty?" (Can't remember the exact quote, word-for-word!)
Although this does not prove nor falsify rather or not TARP did increase lending, this picture at least makes you question the validity of TARP.
