I’m open-minded. What would have happened in the absence of TARP (the original not the porked out Congress version) or any Fed intervention? Walk me through it. Maybe I’m not seeing it correctly.
Complete collapse of the credit system for years as banks unwound billions of derivatives and took massive losses. Runs on liquidity as everyone pulled out cash. Thousands of banks go under. Bigger collapse in asset prices unable to be paid back as they are now under water. Even more businesses shut down and tens of millions lose their jobs. It would have been what happened but x 1000. TARP allowed the Fed to step in as the lender of last resort and backstop the losses thereby securing the “full faith and credit” of the financial system.
Yes it “distorted” the market and didn’t “allow it to clear” but the impact of that would have been disastrous. TARP did what it was supposed to do and stopped the freefall into many years long credit collapse.