Mitt Romney - TARP

Summary

While Governor Romney has stated that he generally opposes bailouts, he did support the Emergency Economic Relief Act that created TARP. In the 2009 CPAC speech, Governor Romney stated that while everyone did not agree on TARP, it was necessary to prevent a cascade of bank collapses. Governor Romney's support for TARP continued into 2010 when he stated that had TARP not been pushed through a free fall may have occurred that would have caused not just the collapse of a few banks on wall street, but banks all across the country, killing not only a few jobs but jobs all across the country.

2009 CPAC Speech

In February of 2009 Governor Romney spoke at the Conservative Political Action Committee. He stated that although many people did not like it, TARP was necessary.

... This economic crisis has proven that government has an urgent obligation to address some awful abuses we’ve seen in the financial sector, particularly in housing finance. Free markets, properly regulated and allowed to work as they should, have propelled America to be the largest economy in the world. For years, Washington politicians did nothing to prevent the abuses at Fannie and Freddie, and in some cases they encouraged those abuses for political gain. Let’s be clear on this point: conservatives favor clear, streamlined and up-to-date regulations and laws that let the economy work, but we will vigorously oppose those politicians who are poised to use their own failures as an excuse to undermine the free enterprise system.

I know we didn’t all agree on TARP. I believe that it was necessary to prevent a cascade of bank collapses. For free markets to work, there has to be a currency and a functioning financial system. But we can agree on this: TARP should not have been used to bail out GM, Chrysler and the UAW. And this is personal for me, I want the U. S. auto industry to succeed. But as some of us pointed out last November, that can only happen if its excessive costs and burdens are restructured. And concessions are going to be few and far between if bondholders and unions already have your money when the negotiating begins. The right answer for Detroit is this: Fix it first.

All of these measures are meant to confront the current economic peril. Properly guided, Washington could in fact speed the recovery. So far, some of the actions it has taken will help, and some will hurt. But we can be certain that the American economy will recover. The invisible hand of the market is more powerful than the lumbering machinery of government. In the final analysis, we know that the private sector — entrepreneurs and businesses large and small — will create the millions of jobs our country needs. ...

Fox News Appearance

On January 28, 2010 Governor Romney appeared on Neil Cavuto's show to discuss the reappointment of Ben Bernanke, TARP, the Stimulus, and other items. 

Neil Cavuto: You know, he (Ben Bernanke) will forever be remembered, fairly or not Governor, for that rescue in the fall of 2008 and judged historically on what he did then. And he argued, as did Tim Geithner yesterday in a grilling yesterday on capital hill ... talking about the Treasury Secretary Tim Geithner ... and most of that grilling as you know coming from fellow Democrats who said that "you know, we wasted a lot of money back then, and the proof is that they all paid the money back in short order." Tim Geithner's argument is that if we didn't do that then, we would have been in a free fall meltdown. Do you agree with that?

Governor Romney: Well, first of all if the money is being paid back, which it is, we didn't waste a lot of money back then. That was an investment made to try and keep a collapse of our entire financial system from occurring. I think that that's the case. I think that had President Bush, and Secretary Paulson, and Ben Bernanke not pushed for a TARP type program, we would have been in a free fall that would have caused not just the collapse of a few banks on wall street, but banks all across the country, killing not only a few jobs but all the jobs in this country.

That's what we were facing, and the TARP program kept that from occurring, and fortunately the money is now being repaid and that's the right thing to happen.

But the big loss ... and this is of course what a lot of folks are doing is diverting attention from the real failure of this last year, this lost year, where President Obama and Congress spent $787 billion dollars and got nothing to show for it.  They said that they would hold unemployment to 8%, it rose to 10%. That was the number that was supposed to happen without that plan. Look, that was the failure here. TARP got paid back and it kept the financial system from collapsing.

Neil Cavuto: So you feel that it was well worth it?

Governor Romney: Well, it was the right thing to do. You know, I remember talking to Senator McCain when he was in the middle of a Presidential campaign when it came up. He said "Look, it is very bad politics to be for TARP, on the other hand it's the right thing for the country."  That's why he voted for it, and that's why a lot of Republicans voted for it. They knew that it was bad politics, but they also realized that if we saw a cascade of bank failures, one after the other, after the other that the entire free economy would grind to a halt in this country and probably other parts of the world. We were on a precipice which now we can sit back and say "Aw, it wasn't that scary." Well frankly it was a very scary time for a lot of people.  

And that's something which is resolved. But the bigger issue, which was not resolved, is how come this economy is not up and growing again and did the $787 billion dollar stimulus plan actually stimulate anything. Or, did it create a bigger debt burden that we're gonna have to pay for for many years to come.

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