When Congress was considering passing TARP when the mud was hitting the prop a year and a half ago, I wrote a lengthy post advocating for its passage, which was uncharacteristic for a self-described libertarian, especially considering what an abomination it turned out to be. I’m not ashamed of what I wrote then and still think it would’ve worked better if they’d done it like they said they would. It didn’t make it in that post, but I hoped later that they’d use the TARP assets sell-off to dismantle the GSE’s. My motivations were long-term libertarian.
My view is that there’s a lot of blame to go around, but some goes to the Nobel committee. Paul Krugman was advocating for basically what ended up being done, and the conversation changed tone when he won a belated prize for his old work in economics. Hank Paulson blinked and it became a purely inflationary money-printing game. Fortunately, those effects have only been seen so far in stock prices, to a degree in housing prices (with a lot of other help), but not in general consumer goods.