By John Tamny of RealClearMarkets
MIT economist Lester Thurow once observed that, “One man’s security [protection] is another man’s lack of opportunity.” Thurow’s words take on greater relevance today given the seeming reluctance on the part of Treasury secretary Tim Geithner and other administration officials to let banks pay back the protective loans foisted upon them through TARP.
So while Geithner suggested in testimony Tuesday that payback might be ok in certain cases, he left himself a lot of wiggle room such that stocks did not retrace all the losses incurred on Monday. Monday’s equity decline was largely due to rumblings from Obama administration officials over the weekend that even healthy banks would face resistance when it came to giving back TARP funds.
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