When we saved the banks we gave them $3 trillion.
If Saving Conoco means we get to take the oil why doesn't saving the banks mean we get to take the money?
#5 | Posted by hatter5183 at 2019-10-28 03:08 PM
The ignorance still displayed by both right and the left regarding so-called 'bank bailout' during the GFC, after more than 10 years, is staggering. 1) Nobody 'gave' banks $3 trillion. Banks received guarantees and Federal Reserve backstop facilities of up to $700B in revolving credit line facility and direct infusion of little more than $200B in exchange of passive, non-voting shares owned by Federal government (i.e., "we, the people") via Dept of Treasury.
Some banks felt they didn't need the infusion, carrying hefty amount of interest to be paid, but they were forced to accept it by Hank Paulson (Treasury Secretary at the time) to avoid speculation on financial condition of other banks.
At any given time there was less than $625B debt outstanding drawn on this facility. The amounts borrowed by the banks as short term loans have been repaid to the Fed with substantial interest, which the Fed returned to the treasury as portion of the profits it makes on lending every year. In other words, the taxpayers made money off this 'bailout' from the banks, not even counting penalties they were later subjected to by the DOJ, SEC and some states agencies who found convenient cookie jars to get their hands into.
why doesn't saving the banks mean we get to take the money?
Whose money would you get to take? The depositors, who keep their money in the bank (mostly in digitally recorded form) and stood a good chance of losing some or most of it (FDIC didn't have nearly as much in their piggy bank to bail out depositors if multiple banks failed, and would have to ask government / Treasury and the Fed to bail it out)? Or shareholders of the banks who in many cases were the same depositors in form of individuals or their pension plans or institutions who held banks' shares in their 401(k)'s? Or would you stop paying the workers at the bank by raiding whatever little (by comparison) amount of money banks had on in payroll accounts?
Unfortunately, most people's idea of what happened is derived from watching many stupid cartoon videos on Youtube, provided by people with good artistic skills but complete financial and economic illiteracy.