Bailing out Wall Street required convincing the people that the financial institutions that caused the crisis were indispensable to an economic recovery; so, they had to be saved at any cost. The media generally are still stuck on that narrative.
The real problem is a collapse of demand. Those bailed-out financial institutions aren't doing anything to address that problem. Instead, they use every opportunity to hoard more cash. They undermine an economic recovery by, for example, raising fees for services and resisting mortgage write-downs.
The solution is to get all the money back that they borrowed, including at the Fed's discount window, and redistribute it to consumers, who will spend it at local businesses all over the country.
Oct 14 2009 - 9:20am