“Bailout” became a curse word in American politics following the 2008 global financial crisis, fueling backlash among people who felt the risks and potential consequences of capitalism didn’t apply to big corporations or the wealthy.
Now the recent failure of two major banks, Silicon Valley Bank and Signature Bank — and federal intervention to backstop the banks’ uninsured depositors — have pushed the B-word back to the center of the nation’s political and economic debates.
While the back-and-forth about whether this intervention was a bailout can be chalked up to semantics, it raises key questions about the structure of the financial system and who the government protects during moments of crisis — and who it leaves out.
“Part of what’s going on stems from the belief that the system is rigged against the little guy,” said Gerald Epstein, a progressive economist at the University of Massachusetts Amherst and co-director of the university’s Political Economy Research Institute. “That’s why there’s so much debate. People are feeling like, ‘Here we go again.’”
