The model shows that you get far more “bang for your buck” by giving the money to firms, rather than banks. Unemployment falls in both case below the level that would have applied in the absence of the stimulus, but the reduction in unemployment is far greater when the firms get the stimulus, not the banks: unemployment peaks at over 18 percent without the stimulus, just over 13 percent with the stimulus going to the banks, but under 11 percent with the stimulus being given to the firms.
There was a brief discussion before our tax dollars went to the richest men on Wall Street as to whether it was better to give bailout money to the banks or give it to the businesses and individuals in debt. But the discussion didn’t last long.
When there are financial lobbyists — especially already inside the Obama White House (Summers, Geithner) — standing at the trough and there’s no one representing the real people of America, we all know who wins the prize.
Obama’s handling of the financial crisis is the worst part of his presidency, in my estimation. McCain would likely have made it worse, but not by much.