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The bank bailouts appear to be widely unpopular. I can only guess this is because people don't truly grasp what was happening, or what the alternative would hav
by jeromec 16y ago
The bank bailouts appear to be widely unpopular. I can only guess this is because people don't truly grasp what was happening, or what the alternative would have been. My congressman was one who initially voted against TARP, and I communicated to him that he needed to change his vote. Like most politicians he is not an expert in economics or finance, and he didn't take kindly to what was essentially the Bush administration "telling us the sky was falling, and putting a gun to our heads." But the sky was falling. The economy was in a free fall with millions of jobs being lost monthly, the stock market tanking, and credit markets -- a crucial cog in our economy -- freezing up. If congress had not acted the financial system would have collapsed. We would now be in a real depression. Imagine how bad people say the economy is now, and multiply that by about 100. I'm talking millions unemployed, homeless, tent cities, crime, and a feeling of hopelessness pretty much everywhere. That would have been the alternative to not bailing out the banks. In that context I don't think many would oppose the bailouts.
Now, was the system set up incorrectly where we could end up in such a mess? Yes. But that wasn't the fault of any one politician or group of politicians at any one time. The problems leading up to the crisis built up in different ways over time. The financial reform President Obama has pushed through addresses some of these issues, for example, by allowing the government the power to break apart and unwind large "too big to fail" type entities without bailing them out with taxpayer funds. When you look at it this way, Congress and both the outgoing and incoming administrations did do what was best for the country, even if unpopular on the surface. This doesn't even get into the fact that a lot of that initial money has been, and continues to be paid back, and in some cases even turns a profit.
- jonpaul 16y agoI think there's a bit of FUD in your statements. I also believe that those who supported the bailout are the same who stood to lose the most i.e. the wealthy. I believe that the bailouts will only further encourage the same behavior and prolong the inevitable.
- evgen 16y agoIf the worst-case, or even most-likely scenarios had llayed out then the wealthy would have lost a lot and the poor and middle-class would have lost everything.
- megaman821 16y agoI don't think the government should have sat back and done nothing but the bailouts were not the right solution. I would have much preferred that they assisted in managing the bankruptcies than preventing/delaying them by throwing money at them. They should be breaking up all those mega-corps like Freddie Mac, Fannie Mae, and AIG, instead the same companies that got us into this mess are still around and as big as ever.
- lionhearted 16y agoI'm not sure I buy the catastrophic collapse argument - it's an easy one to make. "Oh man, things would have been a lot worse if we hadn't done all that stuff we did." Well, maybe. But let's just say it's true for now. Even if that's the case, those organizations could have been liquidated and their assets sold off, perhaps with the key pieces under some sort of guarantee from the Federal Reserve or Treasury or "Bureau of Stabilizing Home Interest and Trust" or whatever feel-good label/acronym these messes are typically labeled. The organizations that made bad bets should've been liquidated, even if you believe the catastrophe scenario (which I'm skeptical of personally).
- elai 16y agoBureau of SHIT ( Stabilizing Home Interest and Trust)?
- deleted 16y ago[deleted]
- ahi 16y agoThe taxpayer could have gotten a lot more for our money. The bailed out banks' should have been nationalized, recapitalized then sold off.