The current issue of p has an article written by Joshua Green entitled, “The Dividends of Wrath,” how anger over the financial bailout gave us the Trump presidency.
The point Mr. Green wants to make is the public or the pitchfork-wielding masses never got its revenge from those who caused the financial crisis and causes them lose their jobs, their homes and their retirement accounts or all three.
He goes on to say, “It’s clear Obama was foolish to think public sentiment could be negated or held at bay.” A substantial number of Americans saw the rising stock market not as a gauge of economic revitalization, but as an infuriating reminder that the financial over class responsible for the crisis not only got off scot-free but was also getting richer in the bargain. The inequity stung. One complaint of voters at campaign rallies is that no Wall Street figure of any consequences served jail time as a result of the meltdown. By contrast, the DOJ prosecuted more than 1,000 bankers after the savings and loan crisis in the 80’s and 90’s.
Mr. Green’s story begins in January 2010 in the office of Treasury Secretary Tim Geithner. You remember him, don’t you? The person who didn’t file his income tax return for years and still was confirmed Secretary of the Treasury. Geithner’s mistake was relying on RoboTax software.
Mr. Green reports that a year earlier when Geithner took the job, the world teetered on the brink of another Great Depression, and the Obama administration had rescued the country from financial ruin.
One telling quote from Mr. Geithner is “in the end, what people care about is what did you do? Did it make things better or not? That’s what you’ll be judged by.”
Actually, the financial crisis had its origins in Washington, D.C., with Congress hoping all citizens would have a comfortable home. It really didn’t matter if you could afford a home or not. It didn’t matter if you had a job, income or a net worth. Just buy it and flip the house.
The government would then buy all the mortgages it could or insure them and sell them across the country as triple “A” investments.
But what might happen if people were to stop paying their mortgages (which did happen on the Bush-Obama watch)?
What happened was, people lost their homes, the government got back homes that had been vandalized and Lehman Brothers and Bear Stearns collapsed. The government didn’t stop there, it arranged for forced mergers, bailouts and Fed lifelines. General Motors was given to the unions and all shareholders and bondholders were wiped out.
The troubled Asset Relief Program or TARP was created and even those banks which didn’t need a bailout were forced to accept TARP funds.
When President Obama was elected in 2008, Gallup reported that 86 percent of Americans were concerned about the economy. In 2013, Gallup discovered that Americans had replaced economic issues as the most pressing problem – it was now government. Getting even for the supposed meltdown was not the reason for Donald Trump’s victory, it was what government was doing to its own citizens.
Both the Bush and Obama administrations favored global economics. The WTO had done its part to move American jobs overseas. Foreign tariffs were killing American exports and unrestrained immigration was keeping U.S. wages low. Student debt was too high and public education was a farce. Whole industries like coal and fossil fuels were slated for closure. Americans especially the middle class could see what was happening and rebelled. They could very easily do so again in 60 days.