Bailouts for Banks, Not for Us?

2008 Financial Crisis Bailout: Who Really Got the Money?

• In 2008, the U.S. government enacted the Troubled Asset Relief Program (TARP)—initially authorized for $700 billion, later pared back to $475 billion by Dodd-Frank

• As of mid‑2012, about $416 billion had been spent:

• $205 billion to purchase banks’ equity via the Capital Purchase Program

• $68 billion to bail out AIG

• $40 billion to Citigroup & Bank of America

• $80 billion to auto companies

• By 2019, economist Deborah Lucas estimated the total direct cost of crisis-related bailouts at roughly $498 billion(~3.5% of 2009 GDP)

• Notably, bailouts didn’t come with tight strings: many banks used the cash to pay down debt, buy competitors, or boost executive compensation—rather than lend to struggling Americans

• Oversight was weak. SIGTARP was later created, but early tracking of funds was poor. Some institutions spent bailout money on lobbying—$114 million in 2008 alone—and extravagant perks (bank execs getting $1.6B in pay/bonuses in 2007)

COVID-19 Era: Citizens vs. Corporations

• Under CARES Act, individuals received two $1,500 stimulus checks, among other personal relief measuresWikipedia.

• Meanwhile, industries got massive help:

• Airlines netted $54 billion, with cargo airlines and contractors receiving billions more (e.g., up to $4B cargo, $5B contractors)

• The justification: otherwise these industries would collapse. But what about families losing businesses, homes, or health?

• Thousands of PPP loans also went to politically connected firms, including hotels owned by major donors and even private-jet companies—while many citizens got only modest checks