General Discussion
In reply to the discussion: A question for Obama and\or his supporters here: [View all]coalition_unwilling
(14,180 posts)I no longer 'support' him the way I did in 2008. Still, as an active member of this board, I'm aware that there are many DUers who remain as enthusiastic or more so and I thought they would be the most adept at providing a rationale for the bailouts.
Your response certainly demonstrates that (and I applaud you for it, by the way).
Just to clarify: are you saying that the FDIC could not have stepped in to take over failing banks and make their depositors whole without the bailouts?
I guess what I'm really asking is why the normal procedure of bankruptcy and liquidation (whereby shareholders are wiped out and bondholders become the new shareholders) was not sufficient in this case, why the risks to investors were socialized while the rewards remained privatized, and why this benefit was extended to the stock- and bondholders of banks but not to individual homeowners with underwater mortgages.