10 Years Later—Assessing The Dangerous Legacy of TARP

When the Troubled Asset Relief Program (TARP) was proposed ten Septembers ago, I was the only large financial company CEO who was adamantly opposed and publicly tried to persuade Congress not to pass the law. After bailouts in the 1970s and 80s, many large businesses already had the expectation they’d be bailed out despite bad behavior or a faulty business model. I was also worried the money would flow to companies that didn’t need it.

In other words, I thought it was very possible that TARP would end up being more subsidy than savior and, in doing so, would deepen a legacy of corporate government dependency.  A decade later, it’s proved to be that way. While businesses should take risks in order to innovate, too many companies are operating today with the notion that, if things don’t work out, Uncle Sam will be there to bail them out.