Even GWB and Paulson need to be commended for doing the right thing..
Gimme a break. The options weren't: 1) do nothing, and 2) do what GWB and Paulson did. They had the option of doing something reasonable, instead of rewarding the worst actors with trillions of dollars and encouraging them to do more of the same.
Here's one description of a more reasonable option, by James Galbraith, that was rejected, and it could have been taken in 2008 or implemented after O took office:
"Law, policy and politics all pointed in one direction: turn the systemically dangerous banks over to Sheila Bair and the Federal Deposit Insurance Corporation. Insure the depositors, replace the management, fire the lobbyists, audit the books, prosecute the frauds, and restructure and downsize the institutions. The financial system would have been cleaned up. And the big bankers would have been beaten as a political force.
Team Obama did none of these things. Instead they announced "stress tests," plainly designed so as to obscure the banks' true condition. They pressured the Federal Accounting Standards Board to permit the banks to ignore the market value of their toxic assets. Management stayed in place. They prosecuted no one. The Fed cut the cost of funds to zero. The President justified all this by repeating, many times, that the goal of policy was "to get credit flowing again."
The banks threw a party. Reported profits soared, as did bonuses. With free funds, the banks could make money with no risk, by lending back to the Treasury. They could boom the stock market. They could make a mint on proprietary trading."
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