I'll repeat what I have posted here before:
Remember that at first the House rejected the bailout bill--*then the Dow lost 777 points in one day.* http://www.cnbc.com/id/26945972 After that, there was no doubt it would pass. If they rejected it a second time the market would go down still further until the bill did pass.
I once compared the situation with Trotsky's justification for initially opposing Brest-Litovsk. True, he said, doing so led to Germany driving deeper into Russia and making the terms of peace even harsher. But it was necessary to reject it at first just to show the Russian people how disastrous rejection would be and how helpless Russia would be if it stayed in the war; without this demonstration the Bolsheviks would have been denounced as German agents. (Actually, Lenin and his party *had* gotten money from the Germans, but that's another story.) In September 2008, tanking stocks had the same effect German tanks had in 1918: they showed that resistance was futile.
One reason the bailout was inevitable is that hatred of banks and Wall Street and bailouts was *not* the predominant popular emotion in September 2008. That mostly came later, after the situation had stabilized somewhat. In September 2008 the predominant public emotion was simply *fear.*
I'm not saying it never happens. I'm just asking how long could the bailouts or whatever the solution was could be delayed by or would waiting longer be complete and utterly bedlam? Something would've happened yes, but the details could have different impacts.
And the point of his post was that we saw complete and utter bedlam, which is why delays came to an abrupt end after the first attempt failed in the House. Nobody was willing to test things any further after that. What you might want would be a POD to make banking industry collapse faster, rather than slow down Congress any more.
That's not what I as wondering. However, what if then the US prosecuted the banks then? Say one of the senators instead proposed a bill to have the FDIC, SEC, FBI and whoever go in to investigate this madness to stop it and pretty much forced the Senate and then the House's hand on the issue.
The Senate would vote down such a bill in a landslide. The Democrats had only a one-vote majority, and Chris Dodd, to name one, was a major friend of the banks. There were, of course, many, many others, including large chunks of Obama's campaign and Cabinet. The critical mass to get such things through Congress wasn't there, and didn't emerge under Obama.
Likewise, there would have been very few prosecutors or regulators who would have gone along with such a hard line, seeing how most of the regulators would have aspired to work in the private sector in the future, and many prosecutors would have to work with, and maintain relations with, private sector actors to do their job. Obama's first Attorney General took on big banks as clients both before and after his stint at the DOJ. They literally kept his office reserved for him while he was with the Administration, in anticipation of his coming back to work with Goldman et al.
I am asking this because I am planning a timeline in the future that would involve this and circumsrances would lead to potentially different attitudes and opinions... but I won't divulge too much info on that.
Would there be a way to sneak in legislature past the bank-allies by exploting their desperation or something?
Maybe, but it would require the chicanery be performed by the administrative state. Which is to say, the Bush Administration. So, really, you need to wait for a Democratic President to envision anything truly radical.
That said, there would still have been time and opportunities for a new Administration to do more. You just need a more radical Democrat than Obama or Hillary Clinton. Not Bernie Sanders, who'd just arrived to the Senate. You'll probably have to pull a Dennis Kucinich or someone like that from the fringes into prominence. Now, this'll probably take a lot of time and research on your part, but good timelines are worth that, and I'm quite sure it'd be something original should it happen.
All right, I'll spill my hand, since I would need help with this. It's a no 9/11 timeline and the greater prominence of white collar crimes like Enron has an impact. Bush is president in 2008 possibly, but ai't doing too good. For a president, I'm thinking Howard Dean for 2008 though Dennis Kucinich could work too.
Iceland prosecuted the bankers and bailed out the depositors. Their unemployment rate peaked at 6.4%. The US threw trillions at the fat cats and experienced unemployment north of 10%.
The Dow was still over 10,000 after the 777-point drop. It fell an additional 3500 points over the next six months after the bailout finally passed.
The bailout was just a heist by fat cats.