Ross Douthat: Bailout may have worked, but we don't have to like it

Nothing in this American election season, no programme or party or politician, is less popular than the Troubled Assets Relief Program (Tarp) of 2008 - aka the Wall Street bailout. No policy has fewer public figures willing to defend it, and fewer Americans who believe it worked.

It was Tarp that first turned Tea Partiers against Republican incumbents and independents against Washington. It was Tarp that steadily undermined Barack Obama's agenda, by making activist government seem like a game rigged to benefit privileged insiders. And it is Tarp that has spurred this campaign cycle's only outbreak of bi-partisanship: As of September, the two parties had spent about $80 million on attack ads invoking the bailout.

The question is whether the programme's extraordinary unpopularity is justified. Few elected officials may be willing to argue for the bailout, but plenty of policy wonks will make the case.

This case was strengthened by the news that the bailout might actually end up costing the US taxpayer less than $50 billion overall, rather than the $700bn originally set aside to pay for it. Moreover, it's the auto industry bailout, which the Tarp funds eventually also underwrote, that is likely to end up being responsible for the bulk of these losses. As it stands, the US federal government may end up turning a modest profit on the money injected into Wall Street's failing banks.

Given what seemed to be at stake in autumn 2008, Tarp's defenders argue, that doesn't seem like such a bad bargain: The bailout may have averted a Great Depression, and it didn't end up costing very much at all.

Or at least, it didn't cost much if you accept that the ends of public policy justify the means. But of course it was the means of Tarp, not its final impact on the country's balance sheet, that made it so unpopular.

The bailout became law because the legislative branch was stampeded with threats of certain doom. It vested unprecedented economic authority in a single unelected official, the Treasury Secretary. And it used public funds to insulate well-connected private actors from the consequences of their recklessness. It may have been an economic necessity, but it felt like a travesty nonetheless.

This is why it should be possible to both sympathise with the politicians who voted for the bailout and welcome their rebuke at the ballot box. Faced with extraordinary circumstances - wars, natural disasters, economic crises - political leaders always incline toward a blunt utilitarianism, in which the need for stability trumps all. But after a crisis has passed, it is vital the ideals reassert themselves so that the moral compromises made amid extraordinary times aren't repeated in ordinary ones.