Comment by Aurornis
22 days ago
The people angry about the 2008 bailout usually have little interest in the facts. I’ve had countless conversations where I’ve tried to tell people that the bailouts were a net positive or that people were, in fact, sent to jail. Outside of people familiar with finance, most people refuse to believe it.
A lot of people I’ve talked to about it weren’t even adults when the bailout happened. They weren’t watching the news and didn’t care at the time. They only know it through pop culture and from fiery speeches from politicians and influencers.
The idea of a bailout has become synonymous with the government handing hard-earned tax dollars over to banks, no strings attached. The facts don’t really matter.
2008 was caused, in part, by the governments deciding many "banks" were "too big to fail".
The fix was for the government to pick some winners, coercively lend them money and force them to buy the failing banks.
Now we have fewer, bigger banks. People who were conservative with money, saved instead of over-leveraging, did not get to buy assets cheaply, because the government propped up asset prices with unlimited, cheap money.
And TARP did eventually produce weak positive returns. So I'm glad they didn't lose money, but I'm not happy I was prevented from buying fire sale assets. I'm also not happy residential housing prices are 2x what they were in 2010 (and still well over 1.5x the peak of the bubble).
> 2008 was caused, in part, by the governments deciding many "banks" were "too big to fail".
Perhaps worth noting that Ben Bernanke, who was the chair of the Fed at the time, was/is one of the most top experts on Great Depression (it's the work he later won the Nobel Prize for). So as bad as the GFC was, Bernanke thought it could get really bad and pushed for measures that he probably thought would prevent another 1930s scenario.
So, the NPE isn't a real Nobel Prize :) but if the only allowable decisions are to concentrate wealth at the top, then we're just delaying and amplifying the collapse.
> but I'm not happy I was prevented from buying fire sale assets.
This is another common misconception about bailouts: That if the government hadn’t stepped in, individuals would have been better somehow or been able to take advantage of a collapsing economy for personal gain.
You wouldn’t be buying fire sale assets and getting great personal returns. That would have gone to corporations, family offices, and people in higher tax brackets.
> I'm not happy I was prevented from buying fire sale assets
People who want a society-wide crisis so they can profit off it are far more morally reprehensible than people who said "we'll loosen the mortgage criteria a bit so people can buy houses, houses always go up in value right?"
Uh, no, we're having a generational crisis because wages are flat and rent cost has been growing for decades. That's quite reprehensible. Unfortunately, in our push for home ownership, we now have a majority of people being homeowners and opposed to lowering prices, and a few companies who can make a profit lobbying to ensure prices only go up.
None of the highest up were sent to jail. CEOs perfectly fine taking responsibility for the profits, but what happened to taking responsibility for the fraud they enabled?
Literally dozens of CEOs went to jail, which is again why I think this may be the biggest ball-drop of the media this century (and there have been some pretty huge ones competing with it)
> None of the highest up were sent to jail. CEOs perfectly fine taking responsibility for the profits, but what happened to taking responsibility for the fraud they enabled?
> > Literally dozens of CEOs went to jail, which is again why I think this may be the biggest ball-drop of the media this century
The GP's remark is centered around the *sentiment* that none of the C-suite / execs in the Big Banks (Merrill, Goldman, BoA, Citi) were jailed for their involvement / excessive speculation in the 2008 crisis.
The keywords there being "Big Banks": If it's a national household name, OR if their positions are coveted by finance employees, it's a Big Bank. Otherwise, it's not a Big Bank.
> > > Your Google skills may need some work because this is the first result for "bank CEO jailed by TARP":
1) This is a goalpost shift from "bank CEOs jailed for causing / excessively speculating up to the 2008 crisis".
2) TARP was established as a result of the crisis (i.e. AFTER it happened), and therefore cannot be used to mark execs that were jailed for their involvement / excessive speculation in the 2008 crisis.
3) "TARP defraudment" is a different matter, and not "Causing the 2008 crisis" or "excessive speculation"
> > > https://archives.fbi.gov/archives/atlanta/press-releases/201...
The case cited only tangentially involves TARP, when the bulk of the case was about the President of FirstCity Bank & his associates defrauding the bank with loans that *they themselves had involvement in*.
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yet you have failed to provide even a single name as of yet. It's easily google-able that all of the major players got off scott-free.
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Grok disagrees, chatGPT disagrees, freaking google disagrees. Could you provide names please?
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What about Pershing Square? in 2008 Bill Ackman gave a presentation on how to crash the housing market and profit from it. Looks like he's still out there destroying peoples' lives.
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Even more fun: people are mad about the bailout here in Sweden. But none of the Swedish banks took any bailouts! Not a single one.
I can’t really remember hearing a Swede complain about bank bailouts in relation to the 2008 crisis. The 90s crisis and related bailouts are however often referenced when complaining about the banks making huge profits these days. Whether that’s reasonable or not is another question.
Most of the anger from regular folk comes from the reinflation of the housing bubble, continuing to price two generations out of home ownership.
If you want to see why people are mad look at what is actually causing them pain. For young people it’s mostly housing costs.
Many blame the bailouts. That may be wrong, but it’s a visible scapegoat.
Anger also comes from many retirees whose retirement savings tanked. Everyday people lost a lot of money, many their homes, and no one bailed them out. It appears to many that those responsible were above the law. It's the same reason people are furious about the Epstein Files, where the only person in jail for what happened is a woman. We see our neighbors dragged out of their houses or cars without a warrant because they don't look "white" and may have committed the misdemeanor of not having proper documentation. And yet, not a single CEO was held accountable for far worse crimes committed -- in fact, they kept their bonuses! These people recklessly inflicted a huge amount of pain on the public, through lost investments, millions of people losing their homes, most young people not being able to buy homes, and creating an even greater divide between the 1% and the rest of us. It is truly weird to read comments that seem to defend them.
I was an adult and my anger is in the sense that banks and car companies got a safety net while the rest of us don’t!
Think of all the small businesses that would love to take particular risks if they knew they wouldn’t have to suffer the normal consequences associated with failure…
Who got access to credit and who was left to go bankrupt and have their lives destroyed? seriously crazy that you can't understand that