By Choosing The Big Banks Over The Little Guy, The Government Is Dooming BOTH
SATURDAY, AUGUST 20, 2011
f the government is going to give anyone money, giving it to the little guy is arguably more fair than giving money to Wall Street fatcats.
Moreover, as Steve Keen demonstrated mathematically in 2009, giving money to the debtors is much better for stimulating the economy than giving it to the creditors.
In addition, because runaway inequality causes depressions, helping out the little guy helps to stabilize the economy.
Government Has Picked Winners and Losers
The big banks were all insolvent during the 1980s.
And they all became insolvent again in 2008. See this and this.
The bailouts were certainly rammed down our throats under false pretenses.
But here’s the more important point. Paulson and Bernanke falsely stated that the big banks receiving Tarp money were healthy, when they were not. They were insolvent.
Tim Geithner falsely stated that the banks passed some time of an objective stress test but they did not. They were insolvent.
Both the creditors and the debtors were mortally wounded by the 2008 financial crisis. The big banks wouldn’t have survived without trillions in handouts, guarantees, loans, idiot-proof profits courtesy of the government.
The little guy hasn’t been helped since 2008. He has been left to suffer…