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Bank, auto rescues aren't getting the credit they deserve - 10/16/2010 10:47:06 AM   
rulemylife


Posts: 14614
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Constant repetition of anti-government rhetoric in our political echo chamber has dulled Americans into overlooking an important and perhaps surprising fact: We have just lived through one of the more notable successes of government intervention in modern times -- the auto and bank rescues that almost surely saved the country from another Great Depression.

....What accounts for the public rage toward Washington? It's one thing to denounce government when it fails to achieve its goals. But to ignore government's achievements in times of crisis is willfully stupid. Especially when, as in the auto and bank bailouts, government was coming to the rescue of private companies that had endangered the country.

A good primer on what government can do in crisis is a new book titled "Overhaul," written by Steven Rattner, the "car czar" who led the $82 billion rescue of General Motors and Chrysler.

....As Rattner tells the auto story, it has the same basic lesson as the financial bailout: Private companies made bad decisions that put the U.S. economy at risk; government made good (if politically unpopular) decisions to keep these mismanaged companies afloat, fearing that a collapse would mean much worse trouble.

And here's the point that nobody in politics seems to get: The government interventions worked. The companies were saved. Most of the money that taxpayers invested is likely to be repaid. Many politicians talk as if the whole process was a disaster, but it wasn't. Private actors made bad decisions, but public officials generally made good ones.
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RE: Bank, auto rescues aren't getting the credit they d... - 10/16/2010 11:52:23 AM   
MrRodgers


Posts: 10542
Joined: 7/30/2005
Status: offline 		The successes of this admin. aren't supposed to get political support or any positive attention just as the recklessness of the last admin. is to be kept quite and disregarded.

It is the same thing when comparing Obama 2 years in with Reagan 2 years in, when we were by the numbers...much worse off under Reagan. Yet the propaganda was that it 'was morning in America again' [sic]

Unceasing propaganda and lies do eventually take hold and can cause extreme political shifts in society. The Nazis were the best example.

(in reply to rulemylife)
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RE: Bank, auto rescues aren't getting the credit they d... - 10/16/2010 1:36:22 PM   
samboct


Posts: 1817
Joined: 1/17/2007
Status: offline 		While I tend to believe Krugman who thinks the financial bailout was a good idea as well as some folks on Wall St. who were looking at bank runs, I've also got some pretty sharp friends, one of whom has a Ph.D. in economics out of Chicago and who works on Wall St. who thinks the whole bailout was a mistake- we should have let the financial firms fail like dominoes. Another friend points out that individual investors wouldn't have been wiped out given the FDIC, but the people who engineered the bailout did it to make sure that their buddies stayed rich. In other words, the people who oversaw the bailout were the ones who got us into trouble in the first place. Balancing that, I've seen too many companies that did get wiped out because their customers couldn't pay for their orders. So while individual consumers might have been OK, I think that a lot more businesses would have gone under quickly.

I'm furious because while I think the bailout was a good idea, we should be making room in our jails for some of these financial whizzbangs who committed frauds- look at the mortgage debacle. CEOs of these companies that told their shareholders that they were sound- they should go to jail for fraud. Credit ratings companies- same thing. I suspect that if people did begin to go to jail, the mood in the country would be a lot less angry. In short- the fault of the Obama administration is not the bailout- all things considered it was probably a good move- the alternative was much riskier and had no real upside, but the lack of accountability of the people that caused this mess that did break the law. So while I certainly blame the previous administrations (I date the problem back to Ronnie Rayguns) for the mess, the current administration didn't do a great job on the cleanup. And I really don't believe the nonsense that if we put CEOs in jail, the credit markets will freeze up. Banks aren't lending money to small businesses anyhow- so you might as well put their CEOs in the pokey.

The other problem is that the stimulus money has been woefully inadequate- and that's also laid at the feet of both the existing administration and the previous administration. Obama should be thundering that we need to put people back to work, deficits be damned. And if any Republicans make any noises- just hoist them with their petard of tax breaks for the rich which drove them up in the first place. You cannot get out of a depression by tightening your belt- Uncle Sam has to be a first customer to get businesses moving again. And I don't really give a damn about the supposed health of the banks-strong businesses build strong banks, not the other way around.

Sam

< Message edited by samboct -- 10/16/2010 1:38:03 PM >

(in reply to MrRodgers)
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RE: Bank, auto rescues aren't getting the credit they d... - 10/17/2010 1:23:50 PM   
rulemylife


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quote:

ORIGINAL: MrRodgers

The successes of this admin. aren't supposed to get political support or any positive attention just as the recklessness of the last admin. is to be kept quite and disregarded.

It is the same thing when comparing Obama 2 years in with Reagan 2 years in, when we were by the numbers...much worse off under Reagan. Yet the propaganda was that it 'was morning in America again' [sic]



In fairness TARP was Bush's proposal, so if you look at it as successful then the credit is mainly his.

(The odds were with him, he had to get something right in eight years.)





< Message edited by rulemylife -- 10/17/2010 1:27:50 PM >

(in reply to MrRodgers)
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RE: Bank, auto rescues aren't getting the credit they d... - 10/17/2010 1:48:06 PM   
popeye1250


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RE: Bank, auto rescues aren't getting the credit they d... - 10/17/2010 1:52:35 PM   
Owner59


Posts: 17033
Joined: 3/14/2006
From: Dirty Jersey
Status: offline 		With all the horrible,disastrous things that happened,it`s not easy to perceive that bad things that didn`t happen.


We averted a depression and stopped the bleeding out of thousands of businesses and started the long road to recovery.

Had GM failed,we could have easily lost another 11 million jobs on top of the 11 million jobs lost under bush.

What would America look like had that happened?


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President Obama

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RE: Bank, auto rescues aren't getting the credit they d... - 10/17/2010 1:53:48 PM   
Fellow


Posts: 1486
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Status: offline 		I guess, the truth is somewhere in the middle: certain type of government intervention was required. What was done by Obama-Goldman Sachs administration was, of course, grand theft by ruling elites. There will be consequences in form of prolonged economic depression or even collapse.

(in reply to rulemylife)
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RE: Bank, auto rescues aren't getting the credit they d... - 10/17/2010 2:22:07 PM   
rulemylife


Posts: 14614
Joined: 8/23/2004
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quote:

ORIGINAL: samboct

While I tend to believe Krugman who thinks the financial bailout was a good idea as well as some folks on Wall St. who were looking at bank runs, I've also got some pretty sharp friends, one of whom has a Ph.D. in economics out of Chicago and who works on Wall St. who thinks the whole bailout was a mistake- we should have let the financial firms fail like dominoes.


With all due respect to your friend, isn't that what led to the Great Depression?

Hoover refused to intervene until the situation was out of control.

quote:


Another friend points out that individual investors wouldn't have been wiped out given the FDIC, but the people who engineered the bailout did it to make sure that their buddies stayed rich.


The FDIC is insurance only for banking deposits, so while calling them investments is true it is also misleading.

The fact is though, had all those banks been allowed to fail the government would have had to bail out the FDIC, and chances are it would have cost more than dealing with the problem from the start.

quote:


I'm furious because while I think the bailout was a good idea, we should be making room in our jails for some of these financial whizzbangs who committed frauds- look at the mortgage debacle. CEOs of these companies that told their shareholders that they were sound- they should go to jail for fraud.


I definitely agree with you here. 

But there have been ongoing investigations both into fraudulent practices that put these banks in that situation and banks that fraudulently applied for TARP funds.

Bank Bailout Fraud On the Rise

quote:


The other problem is that the stimulus money has been woefully inadequate- and that's also laid at the feet of both the existing administration and the previous administration. Obama should be thundering that we need to put people back to work, deficits be damned. And if any Republicans make any noises- just hoist them with their petard of tax breaks for the rich which drove them up in the first place. You cannot get out of a depression by tightening your belt- Uncle Sam has to be a first customer to get businesses moving again. And I don't really give a damn about the supposed health of the banks-strong businesses build strong banks, not the other way around.



The only thing I can disagree with here is your last statement.

We've had numerous bank failures in the last few years.  Without the bank bailout we would be having many, many more.

FDIC insurance is funded by a tax imposed on banks, it does not have an unlimited reserve.

So the only alternative to many people losing their savings due to to massive bank failures would be the government stepping in to shore up the program.

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RE: Bank, auto rescues aren't getting the credit they d... - 10/17/2010 4:27:18 PM   
brokedickdog


Posts: 114
Joined: 8/13/2010
Status: offline 		Um, the banks were bailed out when they should have been subjected to criminal prosecutions. No circumstances under which that was a good decision.

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RE: Bank, auto rescues aren't getting the credit they d... - 10/17/2010 4:32:39 PM   
DarkSteven


Posts: 28072
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Status: offline 		Hell, if the banks were really in that much trouble, we should have been able to get their assets for pennies on the dollar.  We paid full price.

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The small-breasted ones want larger breasts. The large-breasted ones want smaller ones. The straight-haired ones curl their hair, and the curly-haired ones straighten theirs...

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RE: Bank, auto rescues aren't getting the credit they d... - 10/17/2010 5:04:44 PM   
pahunkboy


Posts: 33061
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From: Central Pennsylvania
Status: offline 		If it worked so well, why do we need another one?


Welcome to QE2

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RE: Bank, auto rescues aren't getting the credit they d... - 10/17/2010 8:43:01 PM   
rulemylife


Posts: 14614
Joined: 8/23/2004
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quote:

ORIGINAL: brokedickdog

Um, the banks were bailed out when they should have been subjected to criminal prosecutions. No circumstances under which that was a good decision.



Um, yes.

Because a lot of us had money in those banks.

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RE: Bank, auto rescues aren't getting the credit they d... - 10/17/2010 8:44:05 PM   
rulemylife


Posts: 14614
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quote:

ORIGINAL: DarkSteven

Hell, if the banks were really in that much trouble, we should have been able to get their assets for pennies on the dollar.  We paid full price.


And we are being reimbursed.

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RE: Bank, auto rescues aren't getting the credit they d... - 10/17/2010 11:15:47 PM   
popeye1250


Posts: 18104
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From: New Hampshire
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quote:

ORIGINAL: rulemylife

quote:

ORIGINAL: brokedickdog

Um, the banks were bailed out when they should have been subjected to criminal prosecutions. No circumstances under which that was a good decision.



Um, yes.

Because a lot of us had money in those banks.



Rule, the FDIC is there to protect depositors.
If banks take a loss it (should) be passed on to their stockholders.

_____________________________

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RE: Bank, auto rescues aren't getting the credit they d... - 10/17/2010 11:36:54 PM   
Hippiekinkster


Posts: 5512
Joined: 11/20/2007
From: Liechtenstein
Status: offline
quote:

ORIGINAL: popeye1250


quote:

ORIGINAL: rulemylife

quote:

ORIGINAL: brokedickdog

Um, the banks were bailed out when they should have been subjected to criminal prosecutions. No circumstances under which that was a good decision.



Um, yes.

Because a lot of us had money in those banks.



Rule, the FDIC is there to protect depositors.
If banks take a loss it (should) be passed on to their stockholders.
I agree.

Except, if banks fail, there is no mechanism for funding businesses. There's nobody to loan me money to expand my restaurant. I'm entirely dependant on cash flow. And cash flow barely pays payroll, buys new inventory, accrues for Fica/FUT/SUT, or even pays utilities.

You've never actually run a businees, have you, Pops? I have. WITH MY OWN FUCKING MONEY.

So don't you dare talk to me about shit you have no fucking idea about, you who sucks at the Federal Tit.


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RE: Bank, auto rescues aren't getting the credit they d... - 10/18/2010 3:35:47 AM   
Real0ne


Posts: 21189
Joined: 10/25/2004
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quote:

ORIGINAL: rulemylife
And here's the point that nobody in politics seems to get: The government interventions worked. The companies were saved. Most of the money that taxpayers invested is likely to be repaid. Many politicians talk as if the whole process was a disaster, but it wasn't. Private actors made bad decisions, but public officials generally made good ones.


paying tax as an investment now thats a novel idea!



quote:

MONEYNETDAILY
Bernanke: Federal Reserve
caused Great Depression Fed chief says, 'We did it. …
very sorry, won't do it again'
Posted: March 19, 2008
9:02 pm Eastern

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.



wake up and smell the coffee LOL


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Yesterdays tinfoil is today's reality!

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RE: Bank, auto rescues aren't getting the credit they d... - 10/18/2010 5:57:30 AM   
rulemylife


Posts: 14614
Joined: 8/23/2004
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quote:

ORIGINAL: popeye1250


Rule, the FDIC is there to protect depositors.
If banks take a loss it (should) be passed on to their stockholders.


I understand what the FDIC does, you did not understand my point that the FDIC has limited resources.

If we were to have enough bank failures then either the depositors would be screwed or the government would step in to provide additional funding.

If the latter happened it is my opinion that it would have cost far more than the bailout which headed off the crisis.



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RE: Bank, auto rescues aren't getting the credit they d... - 10/18/2010 5:57:44 AM   
Owner59


Posts: 17033
Joined: 3/14/2006
From: Dirty Jersey
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quote:

ORIGINAL: brokedickdog

Um, the banks were bailed out when they should have been subjected to criminal prosecutions. No circumstances under which that was a good decision.


quote:

(in reply to rulemylife)
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Ahhhh,more "principled" pronunciations.

So saving the entire US economy and possibly the world economy wasn`t a good decision?

Thanks to Phill Gramm,what the banks did was quite legal.



Think about that for a sec.

_____________________________

"As for our common defense, we reject as false the choice between our safety and our ideals"

President Obama

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RE: Bank, auto rescues aren't getting the credit they d... - 10/18/2010 6:27:30 AM   
rulemylife


Posts: 14614
Joined: 8/23/2004
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quote:

ORIGINAL: Real0ne

quote:

ORIGINAL: rulemylife
And here's the point that nobody in politics seems to get: The government interventions worked. The companies were saved. Most of the money that taxpayers invested is likely to be repaid. Many politicians talk as if the whole process was a disaster, but it wasn't. Private actors made bad decisions, but public officials generally made good ones.


paying tax as an investment now thats a novel idea!


First, learn how to cite and quote.

Don't post the words of the author of the article as if they were mine.

Second, if we had not made that investment the economy would be in a lot worse shape.

Third, the point that you made about an investment is accurate.  These bailouts were not the giveaway many people assume.  Most of this is being paid back with interest.

quote:

ORIGINAL: Real0ne
quote:

MONEYNETDAILY
Bernanke: Federal Reserve
caused Great Depression Fed chief says, 'We did it. …
very sorry, won't do it again'
Posted: March 19, 2008
9:02 pm Eastern

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.



wake up and smell the coffee LOL



What am I supposed to wake up and smell?

Your link says the same thing I did:

The problem within the Fed was largely doctrinal: Fed officials appeared to subscribe to Treasury Secretary Andrew Mellon's infamous 'liquidationist' thesis, that weeding out "weak" banks was a harsh but necessary prerequisite to the recovery of the banking system.

A concept that failed.

Yet, we have people complaining today that this should have been the approach to the current problems.


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RE: Bank, auto rescues aren't getting the credit they d... - 10/18/2010 6:51:11 AM   
DarkSteven


Posts: 28072
Joined: 5/2/2008
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quote:

ORIGINAL: rulemylife

quote:

ORIGINAL: DarkSteven

Hell, if the banks were really in that much trouble, we should have been able to get their assets for pennies on the dollar.  We paid full price.


And we are being reimbursed.



It was a risky bet, to say the least.  Any private investor would have demanded a hefty discount.  I'm not saying that we should have demanded as stiff a discount, but... c'mon.  The banks fucked up big time and acted unethically - I want to at the very least see something in place so they don;t gamble again, knowing that it's taxpayer money they're risking and not their own.


_____________________________

"You women....

The small-breasted ones want larger breasts. The large-breasted ones want smaller ones. The straight-haired ones curl their hair, and the curly-haired ones straighten theirs...

Quit fretting. We men love you."

(in reply to rulemylife)
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