It's entirely possible that Barack Obama's political downfall has nothing to do with Health Insurance Reform, Afghanistan, Iraq, or the Bailouts, or the Economy, but our collective inability to understand what he did and how helped fix it.
Yes, we may be too stoopid to understand how the Obama Administration saved the country.
Slate and Newsweek's Daniel Gross:
The initial effort that Paulson began, and that his successors in the Obama administration continued, had the characteristics of an investment fund. Under the Capital Purchase Program, the government would borrow from the public at low rates—1 percent or so per year—and lend the money to banks at 5 percent, through the purchase of preferred shares. As investors in troubled companies do, the government demanded something extra: warrants, which are the right to buy a stock at a set price. It's kind of like lending money to someone to buy a house but getting ownership of the basement as part of the deal.
While there are still perils and pitfalls to come (for example, the strongest Banks are of course returning their money first, while the weaker ones can be expected to hang on a little longer, thus lessening the chance of getting that money back), the worst we can expect, at this point, is to break even:
Given the returns thus far, Herb Allison, the former CEO of TIAA-CREF who was tapped by Timothy Geithner to run the TARP, notes that "it's quite possible we'll have a positive return on the CPP program as a whole." That's possible.
The Bonddad (for waaay more technical reading of this):
There are a few basic points that seem to get lost in the TARP debate. The first is these are actually preferred shares that pay interest.
