Four years ago, the Troubled Assets Relief Program was passed, which basically cleared big banks of their worthless mortgage-derived securities. I remember when this initial bailout was proposed, it was justified on account of the banks being "too big to fail" (why didn't anyone express concern that these banks were too big to allow to do the stupid things it did to get in trouble?).
TARP simply kept these specific institutions around. This does not equate to 'success.' We couldn't ignore the possibility that, having allowed for the failure of these banks, there would have emerged smaller, stronger and less politically tainted banks with cleaner assets. And although it would have been a painful correction, the Dollar would be in less trouble than it is today, and the US government not as deep in debts and deficits.
Unfortunately, the propagandists will use TARP, now and the future, as justification for future bailouts, which are sure to come because the financial system is in worse shape now than in 2008. TARP will be held up as 'evidence' that government can save an economy, even though it is tolerance of such stupid practices that got the US in its mess in the first place.
But this couldn't last forever. If things get so bad, and the dollar continues to decline, people will have to turn away from their banks, to the point that no bailouts can save dinosaur cronies.
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