[wahern]

Because the financial crisis wasn't caused by mortgages, it was caused by highly leveraged derivatives packaging those mortgages. But for the derivatives, all we would have seen was a humdrum correction in the mortgage market, possibly without any recession at all.

TARP was principally used to buy those derivatives to shore up the financial system. If it was used to buy mortgages directly it would have required orders of magnitude more money (you couldn't just buy out subprime because the entire market had seized up), and it couldn't have been executed quickly enough to forestall further collapse of the system.

The reason only a handful of entities saw substantial TARP money is precisely because those were the entities at the most critical positions in the system. And the fact that they were so critical and important would have obvious correlations (both nefarious and benign) with their political and bureaucratic ties.

Yes, it was unfair, but the unfairness wasn't with TARP but with the financial system TARP was shoring up. If all we cared about was some superficial notion of fairness we could have simply allowed the entire CDO mortgage market to collapse, taking the rest of the financial system down with it. Indeed, many people at the time argued for precisely that.

If people want to be indignant, be indignant at the limited scope of the subsequent reforms, and be especially indignant at the silent deconstruction of those reforms.