TARP! The Sequel?

The period from late 2008 through 2009 was frightening.  In the previous post I talked about small investment firms that went bankrupt due to the fall of Lehman.  But genuine fear ran through me when a relative’s business went under in early 2009, again, as an after effect of the failure of the investment banks from the previous fall.

Let’s call this relative Jane, who is an MBA with a great track record.  She wanted to develop a small restaurant idea into a business.  She developed a business plan, searched for the right location, developed a theme, leased space, retained an architect, paid attention to every detail from food to drink to ambience, AND the result was spectacular.  Every time my wife and I visited we were awed at the accomplishment. 

So Jane got up early every day and got home late every night.  She always looked tired, as well as proud, deservingly proud. 

And then one day we got an email saying that Jane was closing her restaurant.  She could no longer get credit.  The standards had changed.  The effects of the investment crisis cascaded down again.

How many times would this story have repeated itself across this country without TARP?