Step 3: Profit!

Via Yglesias, news that the U.S. government has made a big profit on the financial system bailouts. Yes, you heard me right. The TARP bailouts have not cost taxpayers a dime; in fact, they have saved taxpayers money. This may sound surprising, but it's actually the historical norm - of all the bailouts we've done (and we've done a lot), the only one that ended up costing the taxpayer was the Savings & Loan bailout in the late 80s.

(Of course, as Yglesias notes, the bailouts of AIG, Fannie & Freddie, and GM could still end up costing more than they bring in...we'll have to wait and see.)

But the point here is that the bailouts worked, at least in the short term. They seem to have saved our financial system - and thus our economy - from collapsing, which is just what they were designed to do. And yes, it's odious that so many of the same jerks and morons in the finance industry who caused the banking mess now get to reap such huge profits as a result of the bailouts. And yes, the bailouts must be combined with financial regulatory reform if they're going to be a net plus in the long term.

But those points do not negate The Point, which is that collective action - direct government intervention in the economy - ended up a net plus for the nation. And all the House Republicans who sacrificed what was left of John McCain's presidential bid in a screeching attempt to stop the TARP bailouts - and everyone who agreed with their no-government mantra - should be looking at theTARP results and saying "Gee, I guess government action can help the economy after all. Gee, I guess my assumption that government always messes up the economy might actually not be 100% right."

Addendum: There's also a lesson here for TARP-haters from the liberal side of the aisle. The bailouts were grossly unfair, and made many fat cats fatter. Nevertheless, the country benefited, and I think most people view that as a positive outcome. When the health of the nation's economy is at stake, fairness should take a back seat...