The Troubled Asset Relief Program or TARP was a group of schemes conceptualised and run by the US Treasury Department to stabilise the country’s financial system and counter foreclosures in the wake of the 2008 financial crisis. TARP aimed at achieving these targets by buying troubled companies’ assets and equity. Global credit markets froze in September 2008, as major financial institutions such as Fannie Mae, Freddie Mac, and American International Group (AIG), experienced severe problems, and as Lehman Brothers went bankrupt. Goldman Sachs and Morgan Stanley changed their charters to become commercial banks, in an attempt to stabilise their capital situations.
To prevent further damage to the economy, TARP was initiated. It was signed into law by President George W Bush on October 3, 2008 after the Emergency Economic Stabilisation Act was passed. The programme was spearheaded by Treasury Secretary Henry Paulson to address the subprime mortgage crisis. TARP initially gave the Treasury purchasing power of $700 billion to buy illiquid mortgage-backed securities and other assets from key institutions in an attempt to restore liquidity to the money markets. TARP rules stipulated that companies involved lose certain tax benefits and, in many cases, placed limits on executive compensation and forbade fund recipients from awarding bonuses to their top 25 highest-paid executives.
In December 2013, the Treasury Department wrapped up TARP. The US government, at that time, concluded that its investments had earned more than $11 billion for taxpayers. TARP recovered funds totalling $441.7 billion from the $426.4 billion invested. The US government also stated that TARP prevented the American auto industry from closing down and saved more than 1 million jobs, and helped stabilise banks.
Telling Numbers: 68 mn fewer people in extreme poverty, but decline slowing
The proportion of people living in extreme poverty globally fell to a new low of 10% in 2015 — the latest available — down from 11% in 2013, World Bank data show. The number of people living on less than $1.90 a day fell during this period by 68 million to 736 million. While this reflects steady progress, the decline in poverty rates has slowed, the World Bank said Wednesday. In the 25 years from 1990 to 2015, the extreme poverty rate dropped an average of a percentage point per year — from nearly 36% to 10%. But it dropped only one percentage point from 2013 to 2015. The estimates will be published in “Poverty and Shared Prosperity 2018: Piecing Together the Poverty Puzzle,” a report to be released on October 17.
Tip for Reading List | Literary Sleuthing: Finding Lolita
Lolita, Vladimir Nabokov’s notorious 1955 novel, was based in part on the story of the abduction, in 1948, of an 11-year-old New Jersey girl named Sally Horner by a 50-year-old paedophile who called himself Frank LaSalle. American journalist and author Sarah Weinman’s The Real Lolita: The Kidnapping of Sally Horner and the Novel That Scandalized the World “weaves together suspenseful crime narrative, cultural and social history and literary investigation” to “tell Sally Horner’s full story for the first time”. Weinman has worked with legal documents, public records and interviews with living relatives to “uncover how much Nabokov knew of the Sally Horner case and the efforts he took to disguise that knowledge”. Both Weinman’s account, as well as a recently published novel by T Greenwood called Rust and Stardust, writes author Diane Johnson in her review of The Real Lolita for The New York Times, “reflect changes in our understanding of paedophilia and sexual abuse as a disorder of power rather than as a side effect of uncontrollable lust…”
Horner died in 1952, two years after she was rescued from 21 months of captivity. “News of her death”, Weinman writes, “reached Nabokov at a critical time in the creation of his novel-in-progress…” Horner’s story, according to Weinman, “buttressed the second half of Lolita”, and “instead of pitching the manuscript into the fire,… he set to finish it, borrowing details from the real-life case as needed”. It was a debt that Nabokov himself acknowledged — in Lolita, the child molester Humbert Humbert asked himself, “Had I done to Dolly, perhaps, what Frank Lasalle, a 50-year-old mechanic, had done to 11-year-old Sally Horner in 1948?” But because, The NYT review noted, “he insisted on the primacy of art over reality, he held that Lolita sprang essentially from his own artistic gifts”.