Systemic bank failure would have halted paychecks for a paycheck-to-paycheck workforce
Evidence
A shorthand way of thinking about the decision to bail US banks rather than let them fail is to consider that there are 311 million people in the United States. Of these, 64 percent are aged 16 or over; about 158 million people work. Seventy-two percent of the working population live paycheck to paycheck, have few if any savings, and would have trouble raising $2000 on short notice. There are, as far as we can tell, about 70 million handguns in the United States. So what would happen if there was no money in the ATMs and no paychecks were being paid out? That was the fear. But what was the reality? Was the US financial system, comprising shadow banks, opaque instruments, bad risk models, and flawed blueprints, actually too big to fail? — Mark Blyth, Austerity, 143
Categorization
- CANDY: The juxtaposition of 70 million handguns with paycheck-to-paycheck workers is a vivid, quotable hypothetical about why banks were bailed out.
- SEED: A rhetorical device worth studying: quantifying a society’s fragility to justify an apparently anti-democratic bailout decision.
- XREF: connects to: The 2009 bailout rescued bankers while imposing austerity on workers — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 391; Letting banks fail produced better outcomes than bailouts in 2008 — Mark Blyth, Austerity: The History of a Dangerous…, 622; Danat exposure caused worsening unemployment only after the bank failed — Sebastian Doerr et al., Financial Crises and Political…, 146
Broader Connections
- The 2009 bailout rescued bankers while imposing austerity on workers
#complicates(0.85) — Yanis Varoufakis, Technofeudalism, 391 - Letting banks fail produced better outcomes than bailouts in 2008
#contradicts(0.75) — Mark Blyth, Austerity, 622