Speaking of favors for Big Money, economist Mark Thoma points out how America's preference for corporate welfare left us with lingering recession hangover.
Thoma explains that the 2008 recession was a "balance-sheet recession." The housing bubble popped, the financial sector got silly, and lots of paper assets disappeared. Households cut back spending and increased saving to restore the balances they lost. Banks got tight with their loans. Both actions put the brakes on economic growth.
The government threw its banker friends TARP to help restore their balance sheets. But regular folks?
A policy that would have provided households with mortgage debt relief could have made a big difference to those trying to rebuild their balance sheets and eliminate debt.
But households didn't get the kind of attention that big banks got. Instead, Americans were forced to mostly rebuild on their own, and this is a primary cause of the ongoing, slow recovery. It would have still taken time to recover even if households had been helped the way banks were helped. A nation can't quickly dig out of a recession that's so deep -- but it didn't have to take as long as it has [Mark Thoma, "The Great Recession's 'Biggest Policy Mistake'," CBS: Moneywatch, 2014.05.29].
Note Thoma's use of the word primary. If you're really cheesed about the slow economic recovery, you should be wishing we'd have thrown mortgage holders a TARP as well. But such are the policy mistakes we make when corporations are first in line at the government table.