Bailout Hasn't Failed, But Banks Need More

By Harry Kimball,  Newser Staff
Posted Jan 14, 2009 1:09 PM CST
Treasury Secretary-designate Timothy Geithner looks on at left as President-elect Barack Obama meets with members of his economic team.   (AP Photo)
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(Newser) – The Wall Street bailout has not failed, but it hasn’t worked yet, either, as evidenced by the renewed call from Barack Obama and the Fed to release more TARP funds, the New York Times reports. Banks that received bailout funds are clamoring for more to stabilize their finances, but the current administration and the incoming one are at odds over how to spend taxpayer money.

Obama has called for funds to aid struggling homeowners, but they may have to come from somewhere else. Ben Bernanke has indicated the second TARP $350 billion, and perhaps more, is needed to help the banks. “This disparate treatment, unappealing as it is, appears unavoidable,” he said. Watchers agreed, to a point. “The problem isn’t that we’ve wasted money,” one analyst said. “The problem is that we’ve put too few conditions on the banks.”