Daddy's Gonna Pay For Their Crashed Car

Yglesias on the ultimate impact of the TARP bailouts:

At the end of the day, the valuable thing that systematically significant institutions got from TARP was not so much the TARP money as investors and creditors’ knowledge that money would be provided in the future if necessary to prevent bank failures. That’s something the banks can’t “give back” nor can the government “take it away.”

I don’t know that this will always be the case, but it certainly set a cushiony, candy-like precedent, adding another safety net just in case — wink, wink — the financials decide to scam the system based upon worthless paper and 40-1 leveraged balance sheets. That is, unless the government begins to do its duty again and regulate the shit out of these bastards.

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