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Where has 'too big to fail' bailout left us?
The 2008 TARP bank bailout was hardly a proud moment in our history. But it likely preserved America’s and even the world’s economy. Otherwise banks that were literally “too big to fail” would have failed.
What puzzles me is why these same financial institutions have been allowed to keep growing since. What makes no sense at all is the claim that the corporate leaders of the offending corporations are not being prosecuted because they too are “too big to fail.” Given the results of their management, it should be easy to find replacements who could do at least as well and cost a lot less to boot.
Leonard Balaban
West Haven
Leonard Balaban
West Haven
posted by Matt DeRienzo at
12:20 AM
1 Comments:
The worst thing that could have happened is to inject enormous amounts of cash at the top of the economy (the big banks) because doing so will always lead to a liquidity trap where the banks have record amounts of cash but can't lend it because there is low aggregate demand. So guess what the geniuses in Washington did and guess what happened? The best response would have been to inject cash at the bottom of the pyramid (where the demand is created that drives production and builds wealth and economic growth). If that had been done all of us would have paid off our debt, demand would be high, creating more jobs, and the banks could have been left to sink or swim with no ill effects because of the strong economy that would exist. The bank bailouts were nothing but an enormous money grab that will hurt every one of us and our descendants for decades to come.
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