Over Paid by $78 Billion?????

The latest from the Congressional Committee that is overseeing TARP:

Elizabeth Warren, a Harvard law professor, said her group estimated the Treasury paid $254 billion in 2008 in return for stocks and warrants worth about $176 billion under the Troubled Asset Relief Program, or TARP.

Where did this figure come from? It is obvious that the Treasury didn't drive a hard bargain. That was the point at the time. The tougher the terms, the more difficult banks would have raising additional capital or repaying the TARP funds. If the Treasury was going to pay the market price, then there was no advantage to doing it in the first place. The entire idea was to lend money on terms that gave the Treasury a nice spread on the investment and relieved the capital strain on banks.
Currently, preferred shares for Bank of America are yielding in the mid teens. Certainly higher then the government deal. However, if the government continues to bail out BAC, then they get their money back. God knows TARP hasn't been much of a success so far, although it is impossible to know what would have happened if the government had just sat around and watched. However, it is grandstanding to claim that a bailout/subsidy to the banking system was a "bad deal." Its not a bug, its a feature.