I pointed out earlier that Pawlenty took a swing at TARP and “too big to fail” during his campaign announcement speech. Pawlenty also called TARP “a bad decision” in his pre-campaign book Courage to Stand. But back in 2008, when he was a John McCain campaign surrogate — and possible McCain running — mate — and the legislation was actually being debated, Pawlenty sang a different song:
In most of his contemporaneous statements on TARP, Pawlenty was careful to make clear he was defending McCain’s position rather than staking out one of his own. But here he was at the National Press Club on August 6, 2008:
MODERATOR: Another questioner asks, “How can you be such an advocate of marketplace economics when airlines, banks, and trillion- dollar mortgage insurers like Fannie Mae and Freddie Mac are in need of rescue by the American taxpayer?”
PAWLENTY: Well, there has been market failure, some of it by business practices, some of it by bad judgment, some of it, perhaps, by other behavior.
But markets are imperfect, but they self-correct. And so in an ideal marketplace, you’d allow those entities to fail. But if you allow those entities to fail, the consequences are so severe for innocent bystanders, namely average Americans who rely on the markets, rely on those mortgages, you know, the consequences are too severe.
So from a pure marketplace principle, you would not bail them out. But we also have to measure that against the consequences to the rest of the country. And, you know, that is an imperfect solution, but, like has been said, they are too big, the consequences are too severe for innocent bystanders to allow them to fail. So it’s an imperfect solution, but you also have to be pragmatic about getting the mess cleaned up.
(Emphasis mine.) In essence, Pawlenty endorsed — however reluctantly — TARP and too big to fail. James Pethokoukis of U.S. News reported at the time, “Tim Pawlenty says he is reluctantly for [TARP].” Salon did a story on “Tim Pawlenty’s bailout shuffle” earlier this year.
Romney continues to say he’s for the good Paulson TARP but against the bad Geithner TARP, so he’s not going to be in a position to make any hay out of this. But expect Republicans running to Pawlenty’s right to bring up these past comments.
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