The truth is that we cannot possibly know if the bailout helped, hurt, or did nothing for the economy. The bailout was not administered in such as way as to find out if it worked and no other bailouts or bailout-like things have ever been administered in such a way as to know if these kinds of things are good, bad, or neutral. Economics – macro, at least – is not science. It is mostly politics with a little bit of math thrown in to confuse people into thinking that it is science. It’s pretty despicable really.
The WaPo get this article on Geithner wrong. The headline is wrong: “An Unpopular Bailout That Helped Save the Economy”
The frustrating thing is that the bailout could have actually made the economy much worse. We just don’t know.
And this is wrong:
“Former government watchdogs say he pursued generous bailouts for Wall Street and not for everyday Americans, but economists say rescuing the financial system averted another Great Depression and saved millions of jobs.”
Some economists certainly do believe this. Others don’t. It’s certainly not a settled debate. And it certainly ain’t science.