[kerkeslager]

> The federal government stepped in to rescue the other big banks and forestall a panic. The intervention worked—though its success did not seem assured at the time—and the system righted itself. Of course, many Americans suffered as a result of the crash, losing homes, jobs, and wealth. An already troubling gap between America’s haves and have-nots grew wider still. Yet by March 2009, the economy was on the upswing, and the longest bull market in history had begun.

This paragraph is conceding a point that should not be conceded. The system did not right itself if many Americans lost homes, jobs, and wealth. 12 years later, not everyone has recovered from the 2008 collapse.

[thephyber]

This line struck me as odd:

> and the system righted itself

I suppose maybe it depends what "the system" refers to, exactly. If it's the same bankers who shape the financial system and the banks who all own part of the Federal Reserve which printed money to put price supports under their worst assets, then sure, "the system" "righted" "itself".

But in the end, there is no right or guarantee that every person will get a job, be able to keep a house, or will not lose wealth. And we should remember that about our future when reading this piece.

[kerkeslager]

> But in the end, there is no right or guarantee that every person will get a job, be able to keep a house, or will not lose wealth.

That's true for most people, but it's simply not true for the wealthy in practice. The government did try to make an example of a few players in the 2008 collapse, but for the most part, the message sent by the handling of the 2008 crisis was that if you're a big enough company and you take a risk that doesn't pay off, the poor and middle class will be forced to subsidize your mistake.

[lazide]

What criteria should someone use to judge 'righted itself'? No event can ever be completely undone, merely compensated for. Many of the people who lost homes should never have bought them leading up to '08 - they only were able to because of unrealistic (and sometimes predatory) underwriting standards and financing that NEVER would have worked out, and blew up shortly thereafter once the people bankrolling it figured out what was going on.

The overall economy recovered, but of course it looked a bit different. It was 4-5 years later.

[Klinky]

Mortgages should have been heavily renegotiated, bailout given to the home owners to pay back the mortgage in a bottom-up bailout. Let's throw in existing homeowners as well, who had made proper payments in the mix, so they get some benefit from the situation.

Instead lots of money handed over to banks to fix their books and toxic assets handed over to the .gov. Lots of people losing their homes and jobs, no one in the financial sector really seeing any jail time or penalty for their malfeasance. Much of the financial sector actually made off quite well during/after the crisis.

We're seeing it again with big businesses getting COVID bailouts, meanwhile politicians are wringing their hands that unemployment insurance benefits are "too high" and "main street" needs to get back to work. Make sure "main street" is held accountable and/or penalized, but it seems there are a lot of golden parachutes and soft landings for big business and the finance industries.

[kerkeslager]

1. I don't think the system "righting itself" for all parties was ever a possibility. The capital to both pay the mortgages AND let the borrowers continue to own their houses simply did not exist.

2. You're looking at this from a perspective of blame. I recently took out a fairly large loan for a purchase myself, and even as a smart, educated person, it was difficult for me to find insight into what a reasonable monthly payment might be. Lenders have far more information than borrowers do. I think if we're going to place blame for the financial crisis, that blame has to be shared, but I think simply based on the information available to the parties involved, we have to place the blame primarily on the lenders, who have far more information and context than the borrowers do.

3. However, I think blame is fundamentally the wrong way to look at this. To me, the entire point of having an economy is to provide people with a better standard of living. If the economy ceases to perform that function, any intervention by the government should be geared toward causing it to perform that function again. Instead, the bailouts were aimed at improving a few myopic metrics, metrics which only benefitted the already wealthy. The problem isn't that the bailout didn't punish the right people: I'm not interested in punishment. The problem is that the bailout made America a worse place for almost everyone.