PointofLaw.com
 Subscribe Subscribe   Find us on Twitter Follow POL on Twitter  
   
 
   

 

 

Treasury's Coloring Book

| No Comments


This week, the Treasury Department put out a colorful brochure, which is entitled "The Financial Crisis Five Years Later: Response, Reform, and Progress." The brochure looks a lot like the slick documents that the Bureau of Consumer Financial Protection produces. Despite its attractive look, much of the substance of the brochure, which celebrates crisis-era emergency programs and the Dodd-Frank Act, is disappointing.

A few examples illustrate the limits of the brochure's utility. Treasury asserts that the auto bailout was worth the $15 billion estimated cost, without exploring whether propping up the struggling companies to preserve jobs in the short term stifled longer run economic growth by preventing resources from going to companies that could use them most effectively. Treasury noted the nearly 7 million private and public loan mortgage modifications, but didn't explore how many of those mortgages had redefaulted. A July 2013 report by the Special Inspector General for the TARP program found that of the 1.2 million homeowners that had permanently modified loans under Treasury's program, approximately 306,500 had redefaulted. The brochure implies that investment banks, clearinghouses, and exchanges were only lightly regulated by the federal government before the crisis. Dodd-Frank intensified regulation of these entities, but all were heavily regulated before the crisis. Treasury reports positive returns from the AIG bailout, but one has to read the fine print to see that the results are on a cash basis and don't include financing or administrative costs. Treasury's pictures are prettier than the story they present.

Leave a comment

Once submitted, the comment will first be reviewed by our editors and is not guaranteed to be published. Point of Law editors reserve the right to edit, delete, move, or mark as spam any and all comments. They also have the right to block access to any one or group from commenting or from the entire blog. A comment which does not add to the conversation, runs of on an inappropriate tangent, or kills the conversation may be edited, moved, or deleted.

The views and opinions of those providing comments are those of the author of the comment alone, and even if allowed onto the site do not reflect the opinions of Point of Law bloggers or the Manhattan Institute for Policy Research or any employee thereof. Comments submitted to Point of Law are the sole responsibility of their authors, and the author will take full responsibility for the comment, including any asserted liability for defamation or any other cause of action, and neither the Manhattan Institute nor its insurance carriers will assume responsibility for the comment merely because the Institute has provided the forum for its posting.

Related Entries:

 

 


Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.