TARP Money for Small Business?

The purpose of TARP money is not to create jobs, not to help businesses in need, not to provide substitute sources of credit but to protect the economy from the systemic risk posed by the collapse of major financial institutions. If the administration has concluded that the risk has receded - then good, don't spend any more money.

So the Washington Post reports. The right reply to this trial balloon? A frenzy of ack-ack. No, no, no, no. The purpose of TARP money is not to create jobs, not to help businesses in need, not to provide substitute sources of credit. The purpose of TARP was to protect the economy from the systemic risk posed by the collapse of major financial institutions. If the administration has concluded that the risk has receded - then good, don't spend any more money. If the administration has concluded that systemic risk has now been overtaken by other risks to the economy - like a severe and protracted recession - it should be searching for expansionary policies. Passing more money through the notoriously inefficient and politicized Small Business Administration ought to be about the last choice of expansionary policy, well behind tax cuts and temporary stimulus spending. If the administration is hearkening to political pressure that small business wants its "fair share," then you have to say: It's awfully early in the game for the administration to have already succumbed to the lobbyists. Maybe they should have relaxed those rules against hiring, on the principle that they do less harm on the inside than on the outside...