The Congressional Oversight Panel has released a report on the eve of the expiration of TARP. The report summarizes the state of TARP.
First, TARP is likely to make money (even making money on what I thought was the worse investments from a return perspective). Of course, as TARP accounting has focused on all along, the ex ante costs were substantial because of the risks. And we will be debating for a long time to what extent the TARP investments were “good deals,” only available to an informed investor with deep pockets and not the average (or low income) tax payer. But making money was not the raison d’etre for TARP.
Second, the report asks
How is the American Economy Performing in the Wake of the TARP, Particularly those Sectors – Financial Markets, Housing, Autos – that have been the Specific Target of TARP Assistance?
Well, the recession is over, spreads that spiked up are down, and the labor market is not losing jobs but is also not generating many new ones (on net). But how about the effect of TARP on the financial system? Here the report relies on opinions (not facts) from four academics – good reading : see pages 91-108. The reports has few answers but many provocative criticisms and topics for future research.