So, what is the report card on the TARP? Did TARP, as Bennanke argued ar the time, rescue lending for small business?
We now know the answer to that question? The Congressional Oversight Panel released its report on commercial lending (by big banks) to small businesses this past Thursday. The result: commercial lending by large banks to small businesses was cut dramatically from 2008 to 2009. Overall lending declined by 4.1 percent, but small business lending endured a disastrous drop of 9 percent, twice the overall rate of decline.
No doubt, the angry attacks on the banks by Obama, as his Administration began its stormy first two years, helped to freeze the commercial banks into inactivity. But, TARP, itself was a foolish idea that has only served to lengthen what would have been a normal recession into something far, far worse.
Thanks, TARP.
