TARP had to be done. AIG alone insured all major US banks. Had it collapsed, the credit our economy depends on would have been destroyed.
Bailing out the People’s mortgages or jobs would have been MUCH more expensive than bailing out the banks.
Had the banks collapsed, we’d have had national and consequently global depression. Imagine utilities being shut off in your home. No electricity, no internet, no water. Imagine the money in your bank account and your parent’s bank accounts disappearing, being left with only the cash in your wallet. While everyone in your family simultaneously loses their job. Society would revert to chaos and violence.
This being said – bank reforms are still necessary. Before internet commerce banks could only operate within their own states – preventing “too big to fail” corporations from developing. But banks of such size have become necessary today to facilitate internet commerce.
Glass-Steagall separated commercial and investment banks. It meant certain banks existed to facilitate job creation. Now those banks exist primarily to profit their owners. Changes must be made to prevent this crisis from happening again – but as unpopular as the bail outs were, they were likely still preferable to their alternative.
Let us recognize the obvious fact that reform is necessary. Another bubble crisis will without doubt happen within the next decade or two if changes are not made to investment and banking laws soon – perhaps it will be student loan debt this time around.
The job-creating function of infrastructure banks needs to be restored.
“Too Big to Fail” banks need to be held accountable for their dishonest business practices with the most severe punishments possible, so that we need not ever again repeat the profoundly avoidable robbery of 2008.