When Goldman announced that it was raising capital to pay back its TARP money, there was a palpable outrage in the blogosphere. The main theme was that TARP money wasn't the only form of government aid Goldman received, so paying it back shouldn't free Goldman from the TARP restrictions (e.g., executive compensation, H1B visas). Josh Marshall said "the idea that simply paying back the TARP money means [Goldman is] back on their own is really a crock." Matt Yglesias said that it was "farcical" to think that "if Goldman Sachs repays its TARP money that it’s no longer a ward of the state." The main forms of government aid the critics focused on were the AIG bailout and the FDIC guarantee on new bond issues. Regarding the AIG bailout, for the eight millionth time, Goldman had hedged its exposure to AIG. The fact that AIG paid Goldman $13 billion after it was bailed out doesn't say anything about how much Goldman would have collected on its hedges had AIG been allowed to fail. This is a silly criticism. As for the FDIC guarantee, this was important, but it's not like a government guarantee on private sector loans is some new privilege available only to Wall Street banks. The SBA guarantees thousands of small business loans every year through the 7(a) loan program (and the guarantee was recently upped to 90%), but I don't hear any outrage over the small businesses in the 7(a) program benefiting from "government largesse." The government also guarantees well over $70 billion in student loans every year through the Federal Family Education Loan Program (FFELP), which includes Stafford loans, Perkins loans, and PLUS loans. Yet in contrast to TARP's restriction on the use of H1B visas, FFELP loans don't require beneficiaries to work for U.S. companies when they get out of school or anything like that. But again, I hear no outrage over the FFELP program—probably in part because a substantial portion of the blogosphere benefited from the "government largesse" of the FFELP program (I know I did). So let's not kid ourselves—the government guarantees private sector loans all the time. If you want to start demanding that government guarantees come with tough restrictions attached, that's fine. But you better be willing to follow that argument to its logical conclusion.