So it looks like the passionately-reviled $700 billion TARP bailout–maybe not quite a Big Bang for the Tea Party movement, but certainly a huge event in its history–will wind up costing the federral government relatively little. Indeed, it seems taxpayers may even turn a profit on the fall 2008 bank bailout. As former Utah Senator Bob Bennett, whom local Tea Partiers deposed this spring in part thanks to his TARP vote, puts it:
“My career is over,” he added. “But I do hope that we can get the word out that TARP, number one, did save the world from a financial meltdown and, number two, did so in a manner that, I believe, won’t cost the taxpayer anything. And even if it did not all get paid back, it was still the thing to do.”
Were that message to penetrate, it could have an important effect on national politics. For instance, Dave Wiegel recently made a persuasive argument that John Thune doesn’t stand a chance as a GOP candidate in large part because he voted for TARP. “How does he dig out of that?” Weigel asks. But what if Thune can now tell Iowans, “Hey, taxpayers, that TARP thing I supported made you some money!”?
I’ll grant that it still won’t be easy. First of all, TARP hasn’t yet turned a profit. Second, it’s not exactly easy to disabuse voters of information they are convinced is true; I bet plenty of hard-core conservative activists simply won’t believe it. Finally, principled conservatives can still make the argument that the government had no business bailing out bankers from their own stupid risky bets–although it’s a lot easier to say that today, when the risk of total economic Armageddon isn’t looming as it was back then.
P.S. If TARP does earn a political rehabilitation, it will be interesting to see whether Sarah Palin–who was for the bailout before she was against it–changes her tack again.