The New York Times Jackie Calmes relays the Congressional Oversight Panel’s audit of the Troubled Asset Relief Program:

“Even so,” the panel concluded, “there is broad consensus that the TARP was an important part of a broader government strategy that stabilized the U.S. financial system by renewing the flow of credit and averting a more acute crisis.”

It added, “Although the government’s response to the crisis was at first haphazard and uncertain, it eventually proved decisive enough to stop the panic and restore market confidence.”

The panel’s 134-page report noted that after 14 months of the program, problems remain. Banks resist making loans, toxic mortgage-related assets still clog big banks’ balance sheets and smaller banks are vulnerable to troubles in the commercial real estate sector.

So the oversight panel bolsters the relatively new conclusion that TARP has, in fact, worked as a government program. I first believed this when the Treasury Dept. announced Monday that they would lose only $42 billion on this Wall Street bailout program that could have cost taxpayers up to $700 billion.

What it seems the Oversight Panel report shows is that the success of TARP has not yet been made tangible for people outside Wall Street: lending is still way down, unemployment is still way up (under-employment didn’t experience the same November rebound), and TARP’s efforts to prevent home foreclosures has been a miserable failure.

But the original mandate of TARP — as rolled out by George W. Bush Treasury Sec. Henry Paulson in Oct. 2008 — was to stabilize the financial system not ensure a broader economic recovery. Here, then, is the unlikeliest example of a successful federal government program.

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