This Friday, SIPA students, professors, and the press gathered to hear David Miller, the U.S. Treasury Department’s Chief Investment Officer, weigh in on the TARP program.  

Mr. Miller began by highlighting the positive effects of the Troubled Asset Relief Program - which he helped to create.

"Banks raised about 150 billion dollars in private capital initially, which ultimately saved hundreds of billions of taxpayer dollars. They helped restore market confidence, reopened credit markets, and laid the groundwork for economic growth," said Miller.  

On the overall cost of the TARP program, Miller had positive news to report, yet did not mention specific figures. "We anticipate that the cost of the program overall will be negligible, and merely a fraction of what was initially estimated. The investment portfolio, taken as a whole, will likely break even."

While breaking even is certainly an incredible achievement for the Treasury, under the circumstances, David also warned about the limits of the Troubled Asset Relief Program

"And TARP has also helped create the conditions necessary for economic growth. And it's important to note that I'm saying conditions necessary because TARP by itself was not meant to start creating economic growth merely help create the conditions."  

Managing expectations, Miller added, "It really is folly to believe that the next crisis can be completely avoided any more than future recessions can be eliminated."

Moderated by SIPA Professor Merit Janow, the floor was opened up for questions. She asked, "One question is how have we really reduced the risk of bailouts?"

Miller responded with an emphasis on the long term. "I think its going to depend on the implementation of Dodd-Frank which is in its early stages, so I think better oversight is critical. The system is more stable but there's a lot of work to do to make sure that there isn't a big destabilizing event."  According to Miller, we are not out of the woods. 

David supports robust regulation. Agreeing with SIPA students, he said the hard part is to retain top talent when regulators are not paid competitively. David himself is an exception, driven to serve. He was a former employee of Goldman Sachs and now works for the Treasury in the Office of Financial Stability.