naked capitalism Fri 2010-09-17 19:42 EDT
Auerback: TARP Was Not a Success -- It Simply Institutionalized Fraud
...the only way to call TARP a winner is by defining government sanctioned financial fraud as the main metric of results. The finance leaders who are guilty of wrecking much of the global economy remain in power -- while growing extraordinarily wealthy in the process. They know that their primary means of destruction was accounting ``control fraud'', a term coined by Professor Bill Black, who argued that ``Control frauds occur when those that control a seemingly legitimate entity use it as a `weapon' to defraud.'' TARP did nothing to address this abuse; indeed, it perpetuates it. Are we now using lying and fraud as the measure of success for financial reform?...Money was ``repaid'', not because the banks were accumulating massive profits as a consequence of their revival, but largely as an outgrowth of the accounting tricks sanctioned by Congress and the White House in the wake of the 2008 financial crisis...When we lie about accounting and leave zombie banks in the hands of those that looted them and caused trillions of dollars of losses we eviscerate our integrity and our efforts at economic recovery...
Auerback; naked capitalism; Simply Institutionalized Fraud; Success; TARP.