Hernando de Soto is a man best known for his theory that poor people can become wealthier if they’re simply given a chance to run their small businesses un-harassed.
His organisation looked at the case of Mohammed Bouazizi - and about 65 others - who set themselves on fire in Tunisia, ahead of the Arab Spring.
TARP was the Troubled Asset Relief Program - a fund which the United States set up to buy all the distressed assets which had been uncovered on the books of banks, insurance companies and others, following the crunch of the Global Financial Crisis in 2008.
We commented at the time how that scheme changed utterly within almost a couple of weeks of its announcement. It went from being a dustbin for bad debt (things like US home loans which would never be repaid, but which had been bundled and sold as high-grade investments)…
…instead the TARP became used as a bail-out fund for ailing businesses. A much more old-fashioned idea, and as far from Republican neo-conservative ideology as could be imagined. Hank Paulson (the Treasury Secretary at the time) may well by now have the acronym “TARP” engraved upon his heart.
Journalists like me came up with a variety of reasons why the change of heart had happened, including that there was probably simply too much toxic debt out there - either to fund, or even to admit to!
Well, de Soto told us that he was just as curious at the time and rang up a friend of his at the SEC, the American financial watchdog.
“What happened?”, he said, “I’ve never seen public policy turn on a nickel like this before...”
(I can hear him saying it - lovely growl of a voice!)
"What stopped TARP from being a kind-of bad bank for all sorts of now-worthless assets?"
The senior bod at SEC admitted to de Soto that they’d done some rough calculations, and quickly figured that the burden of toxic debt might amount to $600* Trillion! The TARP was originally set up to look after (just!) $700 Billion worth of bad assets.
And the world’s economy is only estimated to be worth about $70 Trillion, all told.
No wonder they re-tooled the TARP!
* $600 Trillion is 600,000,000,000,000
You can see what that looks like in dollar bills here