On numerous occasions in 2008 and 2009, the Federal Reserve Board invoked emergency authority under the Federal Reserve Act of 1913 to authorize new broad-based programs and financial assistance to individual institutions to stabilize financial markets. Loans outstanding for the emergency programs peaked at more than $1 trillion in late 2008.

In December, the Treasury department reported fully divesting from AIG, and making $23 billion in profit for the taxpayers in the process. Yes, that includes investments from both the Treasury and the Fed. The AIG stock sale is only in the latest in the already successful and profitable financial institution "bailouts" managed under the Treasury Secretary who gets too little credit for rescuing our economy from the financial meltdown: Timothy Geithner.The latest CBO estimate of a total of $24 billion loss to taxpayers from the Troubled Asset Relief Program (TARP) included an estimated loss of $14 billion from the government's assistance to AIG (the rest were losses from the auto industry rescue and mortgage programs). Instead, the treasury's portion of the AIGcomes to $5 billion. Adjust the CBO estimate for the $19 billion reversal ($14 billion estimated loss vs. $5 billion actual profit), and theEven that is an overestimation, since the Treasury will get some of the money the Fed made in the form of excess payments that the Federal Reserve makes to the treasury.Even before the latest AIG sale, the bank bailouts portion of TARP had already turned a profit . $245.2 billion of taxpayer funds went to bail out the banks (that's right, not $700 billion, as screechers on political extremes keep repeating), and as of October, with interest, the taxpayers had made $266.2 billion. This is not just a turnaround from the time when the crisis began and we thought we'd lose every penny of taxpayer dollar in TARP. This is a stunning miracle. It's one that was made possible by steadfast leadership of, yes, the much scorned Tim Geithner.But but but. BUT! What about the Federal Reserve's handouts to the banks during the financial crisis??? There wasthey tell me! Compared to that, the Treasury program is just chump change! See, the American people had the wool pulled over their eyes!!!The $16 trillion number comes from some funny accounting of its own. You get there if, and only if, you combine all the emergency short-term loans the Federal Reserve gave out to the largest banks between December 1, 2007 (a considerable amount of time before the financial disaster hit, but the beginning of the Bush recession), through July 21, 2010, a 32-month period. These loans are paid back quickly to the Fed. According to the same audit of the Federal Reserve conducted by the Government Accountability Office (GAO) used by many to cite the $16 trillion number,for the Fed's part in the rescue at any one time. In fact, the audit shows that the largest outstanding balance at any one time was slightly over $1 trillion. That fact is staring you right in the face in the opening paragraph of the audit report:You know what's even more intriguing? Most of the Federal Reserve programs to bail out banks and financial institutions had aat the time of the release of the audit.If that doesn't seem to jive with everything you have heard from both political extremes beating up on the Fed, consider this: the Federal Reserve is aIt is America's central bank. Its primary job is to lend money to other banks, mostly short term loans that are paid back right away. Hence, the Fed gets to set "the" interest rate - i.e. the rate banks pay to it (and each other) on overnight loans. Why is this done? Basically, to keep the money supply moving (if we have an economic "engine," a moving money supply is it) and to make sure banks don't suddenly run out of money while conducting transactions. They had to do a lot of it to keep liquidity in the market so that everything wouldn't just come to a screeching halt during late 2008. You allremember that period, don't you?The biggest longstanding commitment of the Fed in the financial crisis has been for mortgage securities, which the Feds bought to take some of the bad assets off from the books of other lenders/banks. The program is now closed (in other words, the Feds aren't buying any more), but they retain about $900 billion in mortgage backed securities -. These are hardly total losses, however, since most of those securities can either be recovered by people paying their mortgages as the economy gets better, or by selling them when the housing market fully recovers.It is natural to want to blame the financial catastrophe on the country's financial sector. And that is also the accurate way to place the blame. It is, however, a serious mistake to blame the management of the TARP program or the actions of the Federal Reserve for the crisis. Both the near zero ultimate cost to taxpayers on the TARP bailout and the fairly clean audit of the Federal Reserve show thatPresident Obama's appointment of Timothy Geithner was, in management terms, a top notch decision. Secretary Geithner's leadership worked, as did Ben Bernanke's at the Fed. To the extent that our financial system, and our economy, is coming back, the Treasury Department under Secretary Geithner and the Federal Reserve deserve a great deal of credit; at the least some gratitude, and certainly not scorn based on talking points that fall apart when facts are brought to light.