Correction to this article

THE federal government is bowing out as America's most hated fund manager. On June 3rd the Treasury reached an agreement to sell the rest of its holdings in Chrysler, a carmaker, to Italy's Fiat. Ten days earlier it began to sell its stake in American International Group (AIG) through a public offering of the insurer's shares. General Motors has returned to the stockmarket (the government still owns 26% of it) and Ally Financial, a former financing arm of GM and Chrysler, will soon follow. In March the Federal Reserve began selling mortgage-backed bonds it inherited from AIG.

Nobody liked the bail-outs, not even the rescued. Tim Geithner, who oversaw them first at the New York Federal Reserve and now as treasury secretary, this week quipped to bankers: “I'm glad to not have as much equity in all of you as a group anymore.” “So are we,” one shot back. The public was the most outraged, yet on a narrow reckoning of profit and loss, taxpayers have little cause for complaint.

When Congress held its nose in 2008 and approved the Troubled Assets Relief Programme (TARP) to spend up to $700 billion to alleviate panic, the White House reckoned it might end up losing half of that amount. In the end $411 billion was ploughed into financial firms, carmakers and schemes to reduce foreclosures and restart private lending. As of June 7th $308 billion of that had been paid back. The Treasury values the remainder at $130 billion but could quite plausibly garner more. In that case it will turn a cash profit on TARP, although the picture would be worse if the Treasury's subsidised lending rates are also counted as a cost.

The Treasury will take a small loss on Chrysler. It is modestly in the red at current market prices on General Motors and AIG (see table). But those losses are more than made up for by profits on banks and the Federal Reserve's portfolios of assets from Bear Stearns and AIG. The Fed has also recorded a handsome profit on its emergency-lending programmes to healthy banks, as did the Treasury on its purchases of mortgage-backed securities and, so far, the Federal Deposit Insurance Corporation on bank-loan guarantees.

The big black hole is housing. The Treasury has so far recorded a loss of $138 billion on Fannie Mae and Freddie Mac, the gigantic mortgage agencies it rescued in the summer of 2008. Data from the Congressional Budget Office that include the implicit subsidy yield a cost through 2021 of $365 billion or more. Actual cash outlays will be lower: the White House reckons the agencies will make money in the next decade, cutting the final bill to just $73 billion.

Either way, the direct bill for America's crisis-era rescues is likely to be remarkably small or to show a profit. America's experience is not unique: Britain estimates its interventions will eventually earn £3.4 billion ($5.6 billion) and Switzerland reckons it has made a $4.2 billion profit so far on its support for UBS. But it is impressive: the IMF puts the average cost of international bail-outs at 13% of GDP.

The government's returns largely reflect market illiquidity during the depth of the panic in 2008. This meant that the Treasury and the Fed bought stakes at fire-sale prices. They helped their cause by playing hardball on the prices they paid and by undertaking stress tests and stimulus measures that speeded the healing of the financial system. Replicating such conditions in ordinary times would be impossible.

Yet in their zeal to protect the taxpayer, American policymakers may have done too little. The Treasury earmarked some TARP funds to refinance homeowners facing foreclosure. But the backlash against bail-outs was so intense that it attached stringent conditions that deterred participation. Of the $46 billion allocated, less than $2 billion has been spent, one reason why the housing market remains so weak. The interventions succeeded at stemming the crisis. They have been a failure at spurring a decent recovery.





Correction: Britain's bail-out interventions are expected to earn £3.4 billion, not the £2 billion we originally reported. This was corrected on June 10th 2011.