I want to grind my teeth every time I think about the U.S. government bailing out banks, but this Washington Post article says the thing has worked:
Sure, you can question how the money was used — many of us have — but you can’t quarrel with the fact that a financial meltdown has been avoided as a direct result of the government’s extraordinary interventions. Fannie Mae and Freddie Mac are providing much-needed support to a mortgage market that would be shuttered without them. The orderly wind-down of AIG‘s book of credit-default swaps prevented the collapse of an enormous financial house of cards. Citigroup was prevented from becoming the next Lehman Brothers, while the balance sheets of the other big banks have been fortified with additional capital in expectation of further significant write-offs.
Who has benefited from all this? Every investor, every household and every business in the United States. You may not like the fact that, as a result of these actions, overpaid bankers were allowed to hang on to their jobs or preserve the value of their stock holdings. And you may be unhappy that the financial system remains in such fragile shape that it is still hard for some people and businesses to get loans they think they deserve. But let me assure you that things would have been a whole lot worse if these actions had not been taken.
