[An earlier version of this piece appeared in Forbes.com.] The proposal passed the House but failed in the Senate in 2009. The Obama administration said they supported it but they didn’t fight for it. President Obama’s Treasury Secretary, Timothy Geithner, was “lukewarm” about the legislation, according to
The fundamental fact is that the US government, as it nearly almost always does, made a policy decision favorable to financial interests. The concern, such as it supposedly was at the time, was that the collapse of the banking industry would have been far worse than millions of people losing their homes. The problem with that argument, as it always is with capitalists, is that when their beloved free-hand of the market is about to crush them for their mistakes, they become socialists. Creative destruction being their mantra they should have welcomed what their own errors had wrought for themselves. But, no. Of course not. The US government always errs on the side of concentrated wealth and corporate power. And in this case the price for that policy choice was the destruction of five plus million ordinary lives.
The fundamental fact is that the US government, as it nearly almost always does, made a policy decision favorable to financial interests. The concern, such as it supposedly was at the time, was that the collapse of the banking industry would have been far worse than millions of people losing their homes. The problem with that argument, as it always is with capitalists, is that when their beloved free-hand of the market is about to crush them for their mistakes, they become socialists. Creative destruction being their mantra they should have welcomed what their own errors had wrought for themselves. But, no. Of course not. The US government always errs on the side of concentrated wealth and corporate power. And in this case the price for that policy choice was the destruction of five plus million ordinary lives.