Defending the Troubled Asset Relief Program The Washington Post’s Steven Pearlstein writes:

Of course, because money is fungible, critics can always say that the Treasury money is now being used to pay excessive salaries or dividends, or finance unnecessary acquisitions — or, for that matter, to clean the toilets or support local Little League teams. But unless the government wants to get into the business of making every spending, lending and investment decision at every major bank, then we have to pretty much have faith that, in a free-market system, banks will use the new capital to run their operations and maximize their profits.

The problem is that the President about to leave the White House, the President-elect about to move in, and the Democrats already in charge of both house of Congress, have no faith in the free-market system. That is why they have, and will continue to, tell banks exactly how to run their business.

The choice is not between no TARP funds on the one hand and some fantasy free-market believing government that will only intervene wisely and at the bare minimum on the other. The real choice is between no new TARP funds and a government with a strong track record of dictating business decisions and an open promise to go right on doing so.