by Mitch Kokai
Senior Political Analyst, John Locke Foundation
As President Bush’s Great Wall Street Bailout steamrolled its way through Congress in late 2008, candidate Obama assailed economic policies based on the notion that government can “give more and more to [those with] the most, and somehow prosperity will trickle down.”
Yet throughout the Obama administration, we’ve see bailouts become even more entrenched. A recent credit ratings update on big banks and an inspector general report on Freddie Mac show that Too Big to Fail is thriving.
Moody’s credit rating agency last week downgraded Bank of America, Citigroup and Wells Fargo, judging that if any of these banks failed, the probability of a federal bailout “is lower than it was during the financial crisis.” Good news, right? But then there was this passage: “Moody’s continues to see the probability of support for highly interconnected, systemically important institutions in the United States to be very high. …”
In other words, a bailout has gone from certain to only very likely.