Treasury Secretary Paulson is rumored to think that he should ask for the remaining $350 billion in the TARP program so that he can allot it before Obama comes aboard. See, e.g., Schmidt and Brinsley, Paulson May Ask for Remaining $350 Billion of TARP, Bloomberg.com, Nov. 24, 2008.
Think that's a good idea? Seems to me Paulson is mostly just giving lots of money to big banks, without enough strings and without enough results. The GAO has issued a 72-page report on TARP noting significant problems with the TARP program. the Treasury Department's inspector general thinks Tarp is a mess. See Declan McCullogh, Cracks in TARP Program, CBS News, Dec. 4, 2008. Oversight simply isn't functioning properly yet. See Paley, Bailout Lacks Oversight Despite Billions Pledged, Washington Post, Nov. 13, 2008. Elizabeth Warren, a very well-respected Harvard bankrupcy expert, heads a new congressional panel set up to provide more accountability for the program, see Pelosi, Reid Name Members of TARP Oversight, The Crypt, Nov. 14, 2008; but it makes it even harder to trust Paulson when Warren says that Treasury is flailing around and not really accomplishing much, as far as the panel can see right now, with its incoherent approach. Henriques, Bailout Monitor Sees Lack of a Coherent Plan, NY Times, Dec. 1, 2008.
Here's Naked Capitalism's Yves Smith's analysis on this issue.
And the Progress Report's analysis, Pulling the TARP Over Your Eyes, Dec. 3, 2008.
And worth reading, because Stiglitz is one of the best economists in the country today, and because he wrote about the problem of giving banks too much leeway back in 1992: Joseph Stiglitz, In Search of Nostradamus, Economists' Voice, Nov. 2008.
By the way, for those who might not have noticed it, the unemployment news was even more terrible than expected, and Democratic leaders in Congress have said that they are committed to providing some assistance to the auto companies, apparently in the form of short term loans. It is expected that legislation to this effect will be brought up in a special session next week. See Vlasic and Stout, Democrats Plan Short- Term Rescue for Big 3, NY Times, Dec. 5, 2008. It likely won't be TARP funds, though; it will be funds from the fuel-efficiency program. It's worrisome when we continue these ad hoc approaches, rather than figuring out how to ensure that the money doesn't just go to those at the top and that the lifeline to factories is a new start for greener manufacturing here in the US.