Americans' Attitudes Toward TARP Make No Sense

At the end of A Few Good Men -- one of my favorite movies -- the two Marines accused of killing a younger weaker Marine are found Not Guilty of murder. But, in a moral twist, they are dishonorably discharged for being responsible in the young marine's death, for putting duty above country.

I remember using this movie, and particularly its ending, as a mnemonic for understanding the United States' public reaction to the atomic bombs in Japan. Despite successfully bringing about the end of the World War II, the killing of hundreds of thousands of innocents was perceived as so far outside the bounds of decency in American life that many of the men associated with the bombing found themselves discredited or marginalized for the rest of their lives. Like the movie's Marines, those men had done their duty -- and yet, in doing so, they had failed to uphold something more precious.

Now, I know Ross Douthat isn't really comparing TARP to the atomic bomb. But actually, he sort of is comparing TARP to the atomic bomb. And he's doing it by drawing on the moral of A Few Good Men: Sometimes, it is is justified to punish people for doing their job in a crisis:

After a crisis has passed, it's immensely important that the ideals reassert themselves, so that the moral compromises made amid extraordinary times aren't repeated in ordinary ones as well.

This point is starkly obvious in wartime. It was understandable, if not necessarily laudable, that Harry Truman used the atomic bomb against Japanese population centers to end years of global total war. But it would have been appalling if the memory of Hiroshima and Nagasaki hadn't created a taboo around the use of nuclear weapons that endures unviolated to the present day. Likewise, the Bush administration's decision to waterboard Khalid Shaikh Mohammed in the wake of 9/11 was far more defensible than the attempt, by many administration apologists, to insist that waterboarding raised no moral or legal difficulties at all, and should be a routine part of our interrogation repertoire going forward.

I want to be fair to this historical parallel, but I also think it's unworkable. On the one hand, you've got a financial market bailout; on the other hand, you've got torture and mass killings. The difference hardly needs spelling out. Risking moral hazard isn't the same as perpetuating hazardous immorality.

But that's a cheap shot. The bigger point is that there's little evidence that voters understand what TARP is, who passed it, or what it actually accomplished, which is to inject credit into the banks at a time of historic distress, stabilize the financial system, save the car companies, and do so at something dangerously near a profit for taxpayers.

But don't tell the taxpayers. So many Americans were against TARP from the beginning that a flurry of angry calls to congress actually forced the House to vote against the program in 2007. If Americans' anger toward TARP were a fine-tuned reaction to Washington's relationship with Wall Street, then Americans would be punishing both parties' incumbents equally, since TARP was passed by a bipartisan vote under President George W. Bush in 2007. Instead, anger against the bank bailouts is just another ingredient in the messy jambalaya of voter outrage about the economy -- and, by extension, about Democrats.

For the record, TARP was created by a Republican administration, approved by Republicans and Democrats, and administered mostly by a Democratic White House. In the upcoming GOP landslide, most voters showing anger toward bank bailouts will vote for the party that wrote the bank bailout, passed the bank bailout, and now gets more money from bailed-out banks. That's "ideals reasserting themselves?"

Voters have no obligation to be coherent. But journalists have no obligation to pretend otherwise.