So what if the plan would have benefited some fat cats? Everything's always going to benefit fat cats. That's how things work, unless you want a Leninist or Maoist society.
What people needed to care about were the 90 million families who own stocks and the millions of people who are about to get kicked out of their homes who had a hope to be able to refinance with someone from the government rather than a collection agency.
You want bailout? FNM and FRE were bailed out. AIG was bailed out. Those directly helped some of the wealthiest people and nations in the world. The AIG bailout could cost the U.S. government hundreds of billions of dollars, because of credit default swaps. Those were bailouts.
This package was about stopping home price depreciation before it hit 40%, 50%, 60%. It was about the private sector being able to buy failed banks, not the public sector, which is what will now have to happen.
I can see how people might think, wait a second, now we can just let the FDIC handle it. The depositors get their money, and the fat cats who work at the banks get lost.
But the good banks needed a place to be able to put their bad loans so they can free up capital and lend again, and now we don't have a place for it. That, again, was what this bill was about.
Without it, who is to say that BAC makes it if housing keeps going down in price? What makes people think that C doesn't go down, now that it has to pay not just for WB's deposits but for its debt?
I am furious about all of this, because of all the bone-headed things I have seen Congress do, the giveaways for the farmers, the foreign aid to Iraq and so many other places, the hundreds of billions spent for weapons systems that the generals and admirals don't even want and the money spent on FNM and FRE and AIG, this was the one plan that might have been a real win for the American people.
And now it is gone. Disgraceful. And trillions will now be lost in the credit markets, the stock market and in housing net worth.
Maybe the purists and puritans believe that this is right. But for everyone who has ever saved a dime and worked hard and invested in a home or a stock, this is a disaster of unimaginable proportions that it will take as long as the Great Depression did for us to get over.