Of the many myths and self-serving lies about the financial crisis of 2008, certainly the most impressive is the near-universal belief that a very large amount of the people's money was used to "bailout" banks around the world, especially in the United States and the United Kingdom.  This bailout bullsh*t takes many forms, from the relatively bland BBC "taxpayer bailout" to the 4th International's outrage that the working class financed the salvation of the banks (check out their website).

Depositors run on the American Union Bank
in New York 1930.

            The most politically inflammatory manifestation of the lies is the slogan of the neo-fascist Tea Party that President Obama "bailed out Wall Street not Main Street".  Common to all of these slogans is a fundamental confusion about the infamous TARP, the Troubled Asset Relief Program (Public Law 110-343 of the US Congress, The Emergency and Stabilization Act of 2008).  This should not be confused (though it invariably is) with the American Recovery and Reinvestment Act of 2009 signed by President Obama (find it at http://www.recovery.gov/About/Pages/The_Act.aspx) which involved no money for banks.
            The first Big Lie about the bailout is that it was the work of the Obama government.  It was not.  It was passed and signed during the late, unlamented presidency of George Bush (the 2nd).  The neo-fascist Tea sippers and the rich that maintain them have been extraordinarily successful in achieving general acceptance that Obama did the bailing.
            The second Big Lie is that the bailout of the banks was done with "our" money, taking tax revenue that could have been used for people rather than banks.  The almost universal opinion is that the bailout had a huge cost that "drained the public purse", and left no money for anything else. This view can be found among the population at large, and by nominally impartial media such as the BBC that should know better.  No tax money was spent on the bailout;  indeed, no public borrowing went to banks.  The re-capitalization (to use the correct term) of failing banks involved the US and the UK governments acting as creditors, by lending money to private sector banks.  Far from pushing these governments into debt, the re-capitalization created assets for the public sector.  For example, in the United States, the Federal Reserve System created credit (as central banks can do), which the US government lent to banks, and those loans were and are assets.
            The third Big Lie is that the so-called bailout had an enormous cost that untold generations of Americans and British will pay, world-without-end.  Completely false:  the US government and the UK government will probably make a profit on the interest on the loans, and as a result of taking partial ownership of the banks, receive dividend payments.  On 15 July 2010, a business website reported, "of the 19 largest American banks, with more than $100 billion in assets, 17 borrowed funds under the [TARP], accounting for 81% of the total funds lent by the Treasury.  Of the 17 largest banks that borrowed money, 76% have already fully repaid the amounts borrowed" (http://problembanklist.com/over-small-banks-may-default-on-bailout-loans-0133/). 
            That the so-called bailout should be criticized is the understatement of the 2000s, but NOT because it "bailed out Wall Street not Main Street", NOT because it was done with "our" money, and NOT because it was costly.  It should be criticized because it gave the Obama administration and the Brown government the chance of a life time which they squandered:  to take political and economic control of the banking system and end financial excesses.  At the minimum, the public control could have prevented excessive salaries and bonuses, and in the United States provided the vehicle for preventing mortgage lenders form expelling people from their homes.  In his 1936 acceptance speech for the presidential nomination, FDR famously said, "This generation of Americans has a rendezvous with destiny".  I regret to say that Barrack Obama missed his.
            It is difficult to account for the near universal belief in this pack of lies.  Part of the explanation is that once the banks were no longer in trouble, the lie of the Great Give-away fell on fertile ground across the political spectrum.  Among progressives it confirmed the usually-correct suspicion that nominally centrist governments are in the pocket of the bankers.  On the other side, especially among the reactionaries and neo-fascists, it became part of their anti-government ideology.  For the banks themselves and capital in general, the slogan of "no more fat-cat bailouts" is easily adapted into an anti-regulation campaign:  giving our hard-earned money to a bunch of fat-cat banks shows we need less government.

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