Today I was asked, "What do you think of TARP (otherwise known as government's Troubled Assets Relief Program)?"  Well, if you have been reading any of my blogs to date, you can probably guess that I don't think much of it.  Let me give you a little context as to why.

Most people think the Great Depression was the only depression in American history, or at best, the only depression of the 20th Century.  And most people are wrong.  It was actually the second depression of the century.  The first happened in 1920 but was over by 1921 and even though unemployment went from 4% to over 12%, while simultaneously the GDP plunged 17%, the whole thing passed like a bad dream. This first depression was unlike the second depression in many ways, which, as we all know, morphed into the Big One.  Why?  Well, then President Warren Harding, a vastly underrated man by the way, did exactly the right thing and cut the federal budget by half, stopped the Federal Reserve from intervening significantly, and cut taxes.  He made no effort to prop up failing industries or print money or get in the way of the free market doing its "job" in any way.

Contrast that to Herbert Hoover, who intervened massively as did Congress at that time adding insult to injury, Hoover was followed by FDR, as vastly overrated as Harding was underrated, who simply compounded the programs started by Hoover and turned the whole thing into a disaster we now know as the Great Depression.

Ok, enough history although the lesson to take away here is the more we intervene the worse we will make the problem. Therefore, I am not only against TARP, but TALF, Fed intervention of any kind, the bailing out of zombie companies and banks, and all the rest of the so-called stimulus.  Oh sure, throwing a  couple of trillion dollars of make believe paper money at anything will give the illusion of a recovery for a while.  That's exactly what happened in 1931 and 1932 when things looked like they were getting a lot better, the stock market zoomed for a year followed but it was all followed by disaster.  Sound familiar?  I know this may ruffle a few feathers, but we should have let the whole thing collapse, the free market work - pain and all - and today we would be on the other side of the mess and looking at a real recovery instead of almost certainly facing the next drop.

So when I see our president and Congress breaking their own rules to use the $200 billion not yet spent by TARP for other new stimulus project well, I just want to scream! It is not only wrong for the economy, but it's a really, really bad decision. There are just no other words for it.  I mean that would entail actually reading and understanding history and understanding that we are in the middle of an economic debacle, so studying anything would evidently be asking too much.

Gee, was I too subtle?  Oh, and as I often say, I truly hope that I am wrong though I know in my heart that I am not.  As always, protect yourself because those in Washington won't.