A question for Obama and\or his supporters here:

[coalition_unwilling]

64. Don't intend to get into a name-calling tit-for-tat here, but

I don't think the question ever really was whether individual mom-and-pop depositors would or could be made whole by the FDIC. They could have and would have been made whole. (Admittedly, there are some problems with the FDIC's own reserves but those presumably could be easily shored up by the Federal Reserve's largesse or by Congress acting to increase the FDIC's reserves.)

I think the 'real problem,' as I understand it, is that these banks were technically insolvent. That is, the banks' liabilities in the form of money owed to depostiors far exceeded their assets, the toxic mortgages and derivatives they held on their books. Usually, in capitalism, when firms are insolvent (or 'bankrupt'), shareholders are wiped out and bondholders become the new shareholders through bankruptcy proceedings. But the government bailouts here allowed shareholders to not have to face the consequences of their poor investments. In essence, while rewards remained privatized, risks were 'socialized'.

I fully understand that the process began under Bush and Paulson. The alphabet soup of bailouts and subsidies reached such a crescendo that it's sometimes hard to keep straight exactly what the bank bailouts even mean any more. That said, I'm almost 100% certain that the bailout policies and practices continued and were extended under Obama, Geithner and Bernanke.

If I might restate my question, is it appropriate for rewards to be 'privatized,' but risks to be 'socialiized' for one segment of the economy while for others (like homeowners with underwater mortgages), both risks and rewards remain privatized?