“Depart from me, you accursed. For I was hungry and you gave me no food, thirsty and you gave me no drink, a stranger and you did not welcome me, naked and you did not clothe me, sick and in prison and you did not comfort me.' They answer, 'Lord, when was it that we saw you hungry or thirsty or a stranger or naked or sick or in prison, and did not care for you?' He answered, 'Truly I tell you, as you did not do it to one of the least of these, you did not do it for me.’”
Matthew 25:40-46
The beginnings of the Great Depression, and the conflicts that tested the Republic to its foundations, and the commitment to freedom around the world.
As a reminder, all US markets will be closed on Monday for a national holiday.
Congressional Budget Office
Troubled Asset Relief Program (TARP) Report
CBO is required by law to report semiannually on OMB’s assessment of expenditures under the Troubled Assets Relief Program (TARP). Today, CBO released the first of these reports. (For more on the TARP program, this blog post from October includes CBO’s analysis of the financial rescue legislation).
Through December 31, 2008, the Treasury disbursed $247 billion to acquire assets under that program. CBO valued those assets using discounted present-value calculations similar to those generally applied to federal loans and loan guarantees, but adjusting for market risk as specified in the legislation that established the TARP.
On that basis, CBO estimates that the net cost of the TARP’s transactions (broadly speaking, the difference between what the Treasury paid for the investments or lent to the firms and the market value of those transactions) amounts to $64 billion—that is, measured in 2008 dollars, we expect the government to recover about three quarters of its initial investment.
The Office of Management and Budget’s (OMB’s) report on the TARP, issued in early December, only addressed the first $115 billion distributed under the program. CBO and OMB do not differ significantly in their assessments of the net cost of those transactions (between $21 billion and $26 billion), but they vary in their judgments as to how the transactions should be reported in the federal budget.
Thus far, the Administration is accounting for capital purchases made under the TARP on a cash basis rather than on such a present-value basis—that is, the Administration is recording the full amount of the cash outlays up front and will record future recoveries in the year in which they occur. That treatment will show more outlays for the TARP this year and then show receipts in future years.
This is an interesting topic, not because we believe in a plot by the wealthy and powerful Americans to throw in their lot with the more pro-business Hitler and Mussolini, but because it helps to portray the early days of the Great Depression in a more realistic light.
They were not a time of dignified suffering and widespread acts of kindness and compassion. They were often mean-spirited, violent, fraught with scams and snares for the weak, a particularly dangerous time in America with the rise of demagogues from both the Left and Right.
This was a difficult period in our history, poorly understood and insufficiently studied in our schools. Here is one aspect of it of which you may never have heard. It tends to upset people, because it disturbs the conventional view of history. This is not particular to the US.
There is no smoking gun in this program. There was a plot. It was investigated and the details of the investigation were not disclosed An American military hero, Smedley Butler, exposed it. This much we do know.
BBC4 does a reasonably even handed job of presenting facts, and surmise, and differentiating them.
Our friend Bart, at NowandFutures.com, has converted the radio broadcast to MP3 and has made it available here:
The White House Coup of 1933
Additional Reading:
The Business Plot of 1933 - Wikipedia
Smedley Butler - Wikipedia
American Liberty League - Wikipedia
