Herman Cain: I supported TARP but not implementation

I’ve always said that I like the vetting process because I think it’s important. Reading Michelle Malkin’s post this morning on the top four GOP candidates, she pointed out that Herman Cain supported TARP. Here’s a quote from the article Cain wrote about it in 2008:

Earth to taxpayers! Owning stocks in banks is not nationalization of the banking industry. It’s trying to solve a problem.

The unprecedented financial crisis has caused the Treasury of the United States to take unprecedented measures to help solve the problem of frozen credit and cash flow for U.S. businesses. …

Wake up people! Owning a part of the major banks in America is not a bad thing. We could make a profit while solving a problem.

But the mainstream media and the free market purists want you to believe that this is the end of capitalism as we know it. It is not for several reasons that they have conveniently not explained.

First, instead of buying toxic mortgage-related assets of banks as originally proposed, the Treasury has changed tactics and will buy equity positions called preferred stocks, which gives us as taxpayers an ownership stake in their success for a limited period of time.

Preferred stock means we get paid a dividend before any other stockholders get paid a dividend when they make a profit. You got a problem with that?

Second, the purchase agreement between the Treasury and the participating banks has an incentive for the banks to re-purchase the stock back from the Treasury within five years.

If the banks do not re-purchase the stock in five years then we get a bigger dividend until they do re-purchase the stock. That’s a good deal!

The free market purists’ objection to this is that it smacks at government control of the banking industry, which is called nationalization. They are correct. It smacks, but it is not nationalization because that would require the government to own at least 51 percent of the entity for an indefinite period of time.

The ownership by the taxpayers is going to be relatively small and nowhere near the amount needed to be called nationalization. So what’s the problem? …

These actions by the Treasury, the Federal Reserve Bank and the actions by the Federal Depositors Insurance Corporation (FDIC) are all intended to help solve an unprecedented financial crisis. Unlike steps taken prior to and during the Great Depression, these actions have a high probability of success.

Just to point out, when Cain said ‘owning the banks’, he wasn’t suggesting nationalization. He was talking about owning stock.

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Here is Glenn Beck asking Cain about it in May of this year:

Cain’s basic point is that while he agreed with the idea of TARP, he didn’t agree with the implementation of TARP, that it turned into picking winners and losers. While that’s an interesting point, he really should have known better than to trust the government to run a program as it was crafted in the beginning, especially with taxpayer money. There’s always a very high chance of wasting taxpayer money when the government is spending it – because it ain’t their money.

Unfortunately there were several politicians I have much respect for that supported TARP, namely Paul Ryan. It seems that many got caught up in the crisis mentality that now regret it. Mitt Romney isn’t one of them, though, as he still defends it.

If this is the biggest negative Cain has, it certainly won’t keep me from voting for him. I personally believe he is very sincere and genuine in his mission to get this nation out of the economic quagmire it now finds itself. Plus, he doesn’t have an immigration problem, he doesn’t have a government health care problem, he doesn’t have a kookie foreign policy problem, and he has momentum that hopefully he can hang on to. And he debates well and has solutions.

And he’s not a politician. I am so tired of politicians.


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