SHEILA BAIR

The Treasure Officials had a reason for bailing out the bondholders. They were afraid that if bank bondholders and owners took big losses at that time, it would “spook” the financial markets and cause even worse panics than then existed. The political pressure would be to bail out the financial institutions which would have lost much more money after the “spooking”. So it was, they argued, less cost to the taxpayer to bail out the bondholders at the beginning and save the bailout costs later. Some argued that there was no reason to bail out the richest people in America if they lose a lot of money so it is not an issue of bail out now or later. History shoed that the financial leaders did have the clout to force the government to bail them out however. There are some who wanted to have a showdown with the wealth banks and other financial institutions and let them go bankrupt and then the economy would right itself. No one really knows for sure which is why Economics is called the “dismal science”—See {596873}.

She was the only major Federal Official who did not support the bailouts of the banks and their bondholders and shareholders. Not one of her insured bank depositors lost their insured funds in the financial crisis. She protected them all but would not protect the banks themselves. Other officials did that and the following year the bank executives took the bailout money and paid themselves and others in the bank huge bonuses when the banks lost billions.

Her style of management was more mission focused than social. She did not try and play with the “old boys’ network” and although she was brilliant in her job and one of the few who tried to head off the Meltdown of 2008 and the Great Recession, she was not as influential among the old boys of the Washington Finance scene as she might have been.

Her style of management was more mission focused than social. She did not try and play with the “old boys’ network” and although she was brilliant in her job and one of the few who tried to head off the Meltdown of 2008 and the Great Recession, she was not as influential among the old boys of the Washington Finance scene as she might have been.

She was the only major Federal Official who did not support the bailouts of the banks and their bondholders and shareholders. Not one of her insured bank depositors lost their insured funds in the financial crisis. She protected them all but would not protect the banks themselves. Other officials did that and the following year the bank executives took the bailout money and paid themselves and others in the bank huge bonuses when the banks lost billions.

The Treasure Officials had a reason for bailing out the bondholders. They were afraid that if bank bondholders and owners took big losses at that time, it would “spook” the financial markets and cause even worse panics than then existed. The political pressure would be to bail out the financial institutions which would have lost much more money after the “spooking”. So it was, they argued, less cost to the taxpayer to bail out the bondholders at the beginning and save the bailout costs later. Some argued that there was no reason to bail out the richest people in America if they lose a lot of money so it is not an issue of bail out now or later. History shoed that the financial leaders did have the clout to force the government to bail them out however. There are some who wanted to have a showdown with the wealth banks and other financial institutions and let them go bankrupt and then the economy would right itself. No one really knows for sure which is why Economics is called the “dismal science”—See {596873}.