There are a few questions that I would like to ask those who would agree with Tim Geithner that TARP was the “most effective government program in recent memory.”
1. Is it possible that TARP could have been designed better? (Or does that not matter?)
2. If Hank Paulson and Tim Geithner could take a time machine to late 2007, to before any bailouts but well after the housing bubble started to implode, would they be better off getting TARP through Congress ahead of time, or pushing for a law signaling that the government wouldn’t bail out any banks?
3. If Paulson and Geithner could go back in time to September 2008, when it looked as though the entire financial system might collapse, which would they rather have passed by Congress: TARP, or the Dodd-Frank financial regulation bill? If TARP, what does that say about Dodd-Frank? If Dodd-Frank, what does that say about TARP?