Washington’s Blog 
Aug 21, 2011
Should Government Help the Little Guy or the Big Banks?
If the government is going to give anyone money, giving it to the little guy is arguably more fair than giving money to Wall Street fatcats.
Moreover, as Steve Keen demonstrated mathematically  in 2009, giving money to the debtors is much better for stimulating the economy than giving it to thecreditors.
Government Has Picked Winners and Losers
The big banks were all insolvent during the 1980s .
The bailouts were certainly rammed down our throats under false pretenses .
But here’s the more important point. Paulson and Bernanke falsely stated  that the big banks receiving Tarp money were healthy, when they were not. They wereinsolvent.
- A d v e r t i s e m e n t
Tim Geithner falsely stated  that the banks passed some time of an objective stress test but they did not. They were insolvent.
Both the creditors and the debtors were mortally wounded by the 2008 financial crisis. The big banks wouldn’t have survived without trillions in handouts, guarantees, loans, idiot-proof profits  courtesy of the government.
So the government chose sides. The creditors were wiped out, just like a lot of Main Street was wiped out. In one sense, the government chose who would live (the giant banks and other bailed out and favored companies) and who would die (the other 99%).
But in fact, the big banks were no longer creditors after the 2008 crash. Specifically, the big banks which held the mortgages and the loans were wiped out.
The government moved the arms and legs of the big banks to pretend they were still alive  … and have been doing so ever since. But they were no longer going concerns after they went bust.
The government pumped blood back in these dead banks and turned them into zombies. They will never come back to life in a real sense … they are still zombies, 3 years later .
By Choosing Wall Street Over Main Street, the Government Has Doomed the Economy
The big zombie banks can never come back to life, and – by trying to save them – the government is bleeding out the little guy.
By choosing the big banks over the little guy, the government is dooming both.