For Bank of America, bailed out in January 2009, Bair largely blames herself for leading her board in voting affirmative: “In retrospect, I wish I had kept the FDIC out of that unnecessary bailout.”
So contrary to her claims and reputation, Bair did not stand in the way of the bailouts. Rather, she was a powerful and strategic enabler who allowed many bailouts to go forward.
Bull by the Horns and other books are changing the narrative from “We saved Main Street from Wall Street and Wall Street from itself” to “We thought the sky was falling and we panicked; we conducted flawed and hasty analysis; and then we bailed out all the big banks.”
As a result, the big banks are even bigger and just as vulnerable to the next crisis. We will suffer from the long-term consequences of these snap decisions for decades to come.
Vern McKinley is Research Fellow at the Independent Institute and the author of “Financing Failure: A Century of Bailouts.”
