Customers Quotes
The Treasure Officials had a reason for bailing out the bondholders. They were afraid that if bank bondholders and owners took big losses at that time, it would “spook” the financial markets and cause even worse panics than then existed. The political pressure would be to bail out the financial institutions which would have lost much more money after the “spooking”. So it was, they argued, less cost to the taxpayer to bail out the bondholders at the beginning and save the bailout costs later. Some argued that there was no reason to bail out the richest people in America if they lose a lot of money so it is not an issue of bail out now or later. History shoed that the financial leaders did have the clout to force the government to bail them out however. There are some who wanted to have a showdown with the wealth banks and other financial institutions and let them go bankrupt and then the economy would right itself. No one really knows for sure which is why Economics is called the “dismal science”—See {596873}.
One of his major ideas is that the masses of the industrial monopoly have a great deal of power and can make or break institutions. However, those who see the people as not very empowered distinguish between two types of power. The wealthy capitalist, the politician, the dictator, can exercise power individually and have a profound effect on the society. The average person however has little or no power to alter society individually; he can only exercise his power together with many others. Most of us think of “powerful people” as those who can exercise their power unilaterally. Mises observes that the masses, acting in concert, can overpower the unilateral powers, and therefore regards the people as the dominant power.
She was the only major Federal Official who did not support the bailouts of the banks and their bondholders and shareholders. Not one of her insured bank depositors lost their insured funds in the financial crisis. She protected them all but would not protect the banks themselves. Other officials did that and the following year the bank executives took the bailout money and paid themselves and others in the bank huge bonuses when the banks lost billions.
