Also, in the document dump the Fed was forced to do, was the fact that much of the borrowing of the $3.3 trillion, a hidden assumption of risk by US citizens, was by foreign banks. UK's Barclays was the largest of the borrowers asking and receiving a huge $232 billion loan more than the second highest user of the Fed, Bank of America who garnered $212 billion. Then came Bank of Scotland at $181 billion, Wells at Fargo $154 billion and others less needy.
During the financial crisis after balking at the idea of purchasing Lehman Brothers, Barclays eventually purchased the Lehman Brothers skyscraper and other targeted assets at fire sale prices.
Barclays today: http://www.reuters.com/article/idUSTRE6B54XS20101206
Basically the Fed rescued the world from utter financial collapse and assumed risk on our behalf on an eye popping scale, the Fed hid the risk from us, and the Fed was lauded for making the right bet. I'm glad they wagered correctly. Whew!
Secrecy about risk led to the financial crises and secrecy led out of it. I guess the question is really that if the job had not been done in secret, would it have ever been done? The Tea Party folk definitely wouldn't have liked us handing out money to foreign banks, believing we should stop all foreign aid.
The $700 billion bailout, a fraction of our money that was actually put at risk, raised a furor among Republicans with their own president proposing it. I believe the Tea Party was sort of born here as conservatives felt that the bailout was wrong, but they had no where to go if they were to affix the blame to themselves. Hence, a new party to join.
However, what was wrong was not really the bailout, although we can quibble about how we should have done it. The incredible sums of money put at risk must at least point to the size of the depression we were heading towards. It wasn't a mere $700 billion dollar problem. I guess the problem is that the average guy will never really get a feel for what could have happened. The average guy votes, but the secret government is the one that has the power. It apparently convinced or didn't need to convince George W. Bush that 4 trillion dollars had to be wagered very quickly (but don't worry too much, we can hide 3/4 of that. The 700 billion will be enough for them to know about. That should blow their minds sufficiently.)
The Fed's original mistake, of course, was in not regulating what they needed to, and letting the invisible hand make policy. Bailout was just picking up the pieces that the powerful invisible hand had crushed.
My prediction for Time's Man of the Year? Wikileaks founder, Julian Assange, for better or worse.
