The $12 Trillion Bailout Was Not "Paid Back"

Liberals are still telling themselves a lie in order to pretend turning hope and change into more of the same wasn't responsible for the predictable backlash that fueled Trump's ascent.

Barack Obama and his entourage are back in the New York Times today admitting that they were totally shocked Donald Trump won the 2016 election. The piece shows that the Democrats were so totally out of touch and entitled, they literally couldn’t believe that promising hope and change — and then bailing out their bank donors who were throwing 10 million families out of their homes — might create precisely the kind of backlash that Franklin Roosevelt warned of in 1938.

Obama and his crew told themselves and their credulous liberal fans that the only thing that could possibly be done to “save the economy” was to give trillions to the banks and give get-out-of-jail-free cards to the bankers foreclosing on millions. Then they betrayed their promise to do bankruptcy reform or really much of anything to help those losing their homes — in fact, they even turned the beleaguered homeowner rescue program into yet another bank bailout. In effect, they pretended to be powerless to do anything other than enrich bankers in the face of the economic cataclysm.

And by 2016, there was a predictable backlash that benefited Trump, who won by flipping 200+ counties that had voted for Obama twice (those counties’ voting pattern challenge the whole idea that racism alone was the deciding factor in the election).

I spent two years reporting out this tragic story for our audio series called Meltdown - the arc from Obama to Trump should be a permanent cautionary tale for the Democratic Party. And yet, after posting a version of this on social media, I see some Internet liberals insisting that his (and Bush’s) bank bailouts were actually all good and cool because they were “paid back.” So I want to take a quick moment to just remind everyone that this assertion is a flagrant lie, and you don’t have to take my word for it - take the word of the Federal Reserve.

Yes, a couple hundred billion dollars of TARP money may have been returned to the government, but that was a fraction of the bailout. As the Fed reported:

“Direct government support for the U.S. financial sector took the form of capital injections, Treasury lending, asset purchases, government guarantees, and unusual central bank support and liquidity provision....The IMF estimated that direct support above and beyond the previously existing public safety net at 82 percent of 2007 U.S. GDP, or $12.6 TRILLION.”

If you don’t want to trust the Federal Reserve itself, fine, maybe you can trust Bloomberg News and the documents its reporters obtained from inside the central bank:

The amount of money the central bank parceled out…dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

Oh, you say you don’t trust the Fed? Well OK, maybe you trust the U.S. Congress’s Government Accountability Office, which put the amount of government support at $16 trillion.

When people joke about living in an Idiocracy, that rings true when we see anyone still insisting with a straight face that bankers - who ruined millions of lives, got legal immunity for their fraud, and got to keep their lucrative jobs — also kindly “paid back” all the support they were given. Whichever of the aforementioned bailout estimates you believe, the banks most certainly did not pay all - or most of it - back.

The fact that anyone insists handing over $12 trillion to banks — while everyone else suffered and got no bailout at all — was the “only” thing that Obama coulda done…well, that just shows how powerful the oligarchs’ brainwashing system really is.