[TheOtherHobbes]

Bank failures are endemic, regular, and predictable. 2008 was a slightly warped replay of many earlier events. (Who remembers Savings and Loan in the 80s?)

It would have been possible to restore confidence in other ways. Traditionally, good assets are collected into good banks, and bad assets are dumped into bad banks. The bad banks get thrown under a bus, and the good banks get full government backing until trust is restored. It's a tried and tested formula that has worked in other countries.

What TARP didn't solve was the endemic corruption and criminality that caused 2008. (Remember how some banks launched foreclosure farms that rubber-stamped property seizures - and sometimes stole property that didn't even have an outstanding loan?)

Unfortunately the corruption goes all the way to the Fed and the Congress, so a full restoration of Glass-Steagall, and jail time for the main perps, was never going to happen.

A few billion in 'profit' sounds like a lot, but it's a drop in the ocean compared to the incredible destruction and loss of economic potential caused by the persistent fraud, aversion to adult supervision, and deep-seated social irresponsibility endemic at all levels of the financial industries.