The setup was really similar. There was runaway inflation in '07 and '08. Everyone was pumping money out of the real estate market though, operating under the flawed assumption that housing prices would never go down. So people would get adjustable rate mortgages that would balloon (say 3% in years 1-5 going to 15% in year 6) with the understanding that they could just refinance or sell. Banks fed the frenzy by offering loans to anyone with a pulse. The worst were so called "NINJA" loans, which stood for no income, no jobs, no assets. You could literally secure a mortgage with zero proof of income. The bank didn't care, they would take the interest, and if you defaulted take the house and flip it for a profit.

You might know how the story goes, the debt got collateralized, sold, there were derivatives, etc. Eventually the inflation outpaced consumer wallets. Personal credit exploded then got tapped out. People couldn't make their mortgage payments. The housing market fell. Everything imploded in October. The banks started failing. Credit froze, businesses couldn't finance, and then the layoffs started. Hundreds of thousands lost their jobs. The balloon mortgages could no longer be refinanced, so those people lost their homes. It was really, really bad.

The banks had trillions of worthless mortgage backed products on their balance sheets, so went crying to the Fed for liquidity. Congress proposed the troubled asset relief program (TARP) to bail out the banks. It was massively unpopular. Something like 70% of people were in favor of letting the banks fail. It was their greed that got us into the mess. Why not bail out homeowners instead? Buy back the mortgages, put people back in their homes, and inject cash into the economy from the bottom up? Not how our country works, obviously. Congress passed TARP, Barfsack Ocrumbo signed it into law, and the asset bubble was reinflated. But there was no help for working people. They got thrown out on their asses.

Banks recovered, but the rest of the economy never did, not really. The factories never reopened. The small business were shuttered for good. Thus our zombie economy was reanimated and has ambled on consuming workers ever since. People were, and still are, very bitter about this. It's a big driver of what makes Obama hated, and I think a pivotal moment in laying the groundwork for the environment we find ourselves in today. Before TARP, many people believed in the government. That moment exposed them all as a pack of self-interested jackals.

Taking it back to today, there are similarities in Bitcoin/AI. Consumers are sick but the market is ripping. The math doesn't math. Credit cards aren't infinite and the music will stop.

The first liberals competed against the past, the incumbent forces of feudalism. Later they were energized by the effort to suppress the socialist future. Now after several generations of uncut capitalist realism, the mortality of capitalism is completely inconceivable to them. Every acknowledgment of the spiraling disrepair is merely a psychological attack on the entrepreneurial spirit.