It’s difficult to make the case that the first $350 billion bailout of Wall Street — so-called “TARP I” — fulfilled its goals, unless one argues that the Street would have imploded without it, which is pretty much what Hank Paulson is saying these days. And since it’s impossible to prove a counter-factual, especially when the Treasury was never clear about TARP I’s goals to begin with, Paulson may have a point. But the easier and probably more correct argument is that American taxpayers wasted $350 billion. No one knows exactly where it went — at least two recent reports reveal that the Treasury had no idea — but we do know the money did not go to small businesses, struggling homeowners, students, or anyone else needing credit, which was the major public justification for the bailout. In all likelihood, on the basis of the skimpy evidence we now have, the money went instead to bank shareholders in the form of dividends; to bank executives, traders, and directors as compensation (directors of major Wall Street banks continued to pull down an average of $350K each in 2008 merely for sitting in on a handful of board meetings at which they obviously didn’t oversee very much); to some holders of bank debt; and to platoons of lawyers, accountants, and other financiers who have advised the banks about other places to park the rest of the money in the meantime.

From Robert Reich’s Blog