BUSINESS
01/09/2013 03:47 pm ET Updated Jan 10, 2013

Matt Taibbi: 'The Bailouts Officially Created A Sucker Class' (Here's Who's In It)

Finally, we have a term for all of those people who've gotten screwed over by the bailouts: "The sucker class."

The stated intention of the post-financial crisis bailouts was to keep the economy from collapsing and ensure the economic well-being of ordinary Americans, but in reality, the bailouts had the opposite effect, according to Rolling Stone’s Matt Taibbi.

“[The] bitter reality … is that the bailouts officially created a sucker class,” he writes in his most recent article.

The term, however, may deserve a broader definition and perhaps a few examples. So here goes nothing:

Sucker class \ˈsə-kər ˈklas\ (noun): A set or category of people with the common attribute of being royally screwed by misguided government efforts to fix the economy.

Examples include:

-Shortsellers: With the economy in recession, some brokers sold off stocks betting that the market would continue to suffer, but what they didn’t realize was that banks had received billions in secret bailout money, along with many billions more in well-publicized bailout money, sending stocks in the opposite direction.

-Unemployed people: The debate over reducing the federal deficit has largely pulled focus away from what Paul Krugman argues is the true economic crisis, the continually weak job market that resulted from the financial meltdown.

-HAMP homeowners: The Home Affordable Modification Program was designed to help homeowners at-risk of foreclosure avoid losing their homes by modifying their mortgages. However, instead of saving their homes, the process of applying for a loan modification often led to foreclosure.

-Hardest Hit Fund homeowners: The Hardest Hit Fund was designed to use bailout money leftover from the Troubled Asset Relief Program to help homeowners. As of April 2012, only 3 percent of the $7.6 billion worth of relief made it to actual homeowners.

-Whistleblowers: Under the False Claims Act, finance employees are incentivized to report cases of fraud with big payouts sometimes worth hundreds of millions. But in most cases, those who report wrongdoing face retaliation and may not get a reward for their troubles for years if they get one at all, as The Huffington Post’s Ben Hallman reports.

-Troubled homeowners: A government lawsuit accusing major banks of foreclosure fraud resulted in a $25 billion national settlement. However, much of that money has failed to reach troubled homeowners, The Huffington Post reports.

-Small businesses: Smaller banks were supposed to use the federal money they got under the Small Business Lending Fund to help small businesses. Instead, many banks used the money to pay back debt leftover from the TARP bailout, The Wall Street Journal reports.

-Taxpayers: Various government bailouts currently cost taxpayers around $155 billion, according to ProPublica.

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