When the Federal Government announced its intention to bail out Wall Street and the banking industry, several reasons were given. High on the list was “to stimulate lending”.
The bailout, essentially orchestrated by a republican administration and reluctantly approved in a mad rush, lacked tracking mechanisms, specificity regarding how thrifts would use their Federal “relief” money and the faintest hint of accountability on behalf of its recipients, who lapped up the “gifts” like water…Happy Holidays!
The first wave of funds quickly vaporized as its recipients showed nothing for it. More money was needed. As it was granted, more abuse surfaced–traders got the sixth highest bonuses in Wall Street’s history, despite the Dow’s worst performance since 1931. Car makers cried “poor mouth” and were eventually heard. Credit card lenders wanted relief as well.
The bailout money flowed but foreclosures continued, car sales stayed frozen, construction stood still, consumer spending crept ever lower, especially on luxury items and big-ticket toys. Layoffs climbed as did unemployment claims. Despite more restrictive, punitive bankruptcy laws enacted by Bush, Americans were filing in record numbers, seniors in particular.
With rates at historic lows, banks still open aren’t lending regular folks money. Some spent bailout funds on mergers and acquisitions.
This, while the rest of us are too poor to pay attention.