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Troubled Asset Relief Program: A Case Study

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Is it possible that two government bailouts paid less than a year apart could result in two drastically different results? As economics writer for the Washington Post, Robert J. Samuelson, says, “Six years ago, it (the auto bailout) was wildly controversial, with the fate of General Motors and Chrysler hanging in the balance. Now, it’s clear that the bailout was a solid success.”. The financial bailout, known as the Troubled Asset Relief Program, has left the banks still reliant on the government in the event of a future crisis (Leonhardt). In 2008, two large industries were on the brink of collapse. George W. Bush signed a bill to put money into the failing auto industry. Barack Obama signed the bill known as the Troubled Asset Relief Program to save major U.S. banks from a financial meltdown (Barofsky). The lessons that we can learn from what went right and what went wrong could ensure greater success of future bailouts. The two bills had different outcomes because of the differences in the oversight of each industry, who the bailouts were supposed to protect, and if the fear of bankruptcy was present.

The main difference between the auto and finicial
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Banks continue to believe that if they fail again, they will get another batch of free government money to help them out. Credit agencies freely admit this in their reports about major banks (Barofsky). As Samuelson simply states, “Fear is a great motivator”. The fear of no longer having a job or a company motivated the auto industry to change to be competitive. Wall Street faces no such fear. Decades and decades of bailouts have proven that they can do what they want without the fear of losing their jobs (Barofsky). Fear is the great motivator of capitalism, and the lack of fear on Wall Street has resulted in banks abusing their size to pressure the federal government into even more
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