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joether -> RE: The day the Ds took over (11/2/2012 2:35:56 AM)
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quote:
ORIGINAL: Yachtie
Initially FDIC could ~cover the 4 or 5 big boys. The smaller regional banks / credit unions were ok. Problem was and still is, the BIG BOYS are wired into Congress and the FED (to big to fail). (Lehman Bros and later MF Global have shown their hands.) As long as the FED props up the banks there shall be no recovery. The markets have to clear and that includes the banks. There is a great danger here also.
Its a bit more complicated and doesnt work the way you understand it. Banks serve a function not well understood by non-financial types. They are like money-changers from ancient times in the sense that without their ability to process information (metaphorically money), the transaction would not take place. Problem that banks were experiencing in 2007 (and even as early as late 2006), was the 'gears' (metaphorically speaking again) were getting gummed up with useless corporate tape (and some goverment tape as well). The ability to process information first became slow and soon after that, degraded rapidly towards stall. But this was not just one bank affected, but all of them (big and small). As Politiesub pointed out above with but one example, the CDO's. It wasnt the only financial concept gumming up the gears either. As this situation intensified, the newly elected Obama Administration decided on a course of action that "...went over like a root canal..." to the American public. The idea was to use goverment funds to serve as a buffer long enough for banks to not only take stock of the numerous 'errors' in their systems and stockpile, but that of the mind-boggling large pile of information processes that needed to be dealt with quickly. However, unlike the previous administration, the Obama administration had specific strings attached to these loans (including that banks could not post net profitability until the loan(s) were paid off with interest).
But you were good to mention not just the big banks, but the smaller banks. The problem experienced by the large banks, was also experienced by the smaller banks. Unfortunately, Congress did not authorize a bill allowing the money recieved from larger banks to be applied towards those smaller banks (which was the game plan from the getgo). It was a Republican that basically threw a monkey wrench into the workings to stop this process from being completed with smaller banks. Yes, at that time, Democrats controlled both the House and Senate, BUT, Republicans had founds numerous ways to undermine, stall and even kill bills destine towards future projects to improve the nation's economy. Republicans doing anything to make President Obama a one term President, right?
quote:
ORIGINAL: Yachtie
Understanding the nature of the Great Depression and ultimately what got us out, being post-WWII rebuilding of Europe and its economic impact at home* (Not FDR), and as the middle class is financially tapped out at present economic activity wise, government has one resource left that most governments, in this situation, have historically utilized. The Bernanke has shot his last bullet with QEinfinity. Sure, the FED could monetize more but that is just more QE. So what's left? War?
Its funny, that you try to state it wasn't the FDR administration that got the nation out of the Great Depression. Since the Great Depression started shortly after the Stock Market Crash on Oct 29th, 1929. And who was President at the time? Herbert Hoover, a businessman and a Republican! The American people quickly got tired of the crappy ideas and failed solutions from that administration. What got the nation out of the Great Depression, was through many programs and solutions by the Roosevelt Administration (i.e. The New Deal). How can you flatly ignore US History in your arguement, Yachtie? Cus it was a Democrat that got us out of a economic depression caused be the actions and inactions of a Republican? As the nation entered World War Two, the American people became much more motivated to produce more things with which to purchase and obtain. In addtion, I have to laugh at your notion that by 'Nation Building' in Europe after WWII, was the sole reason this nation got out of the Great Depression. Yes, many years later, one, President George W. Bush would 'Nation Build' into Iraq and Afghanistan to 'improve' things at home, but left the nation saddled with a $4 trillion debt as a result.
It would be a laughing matter, if it werent because of the serious situation the nation finds itself in, Yachtie. That you believe that the middle class situation is simply one or two things. Its a very vast set of very complicated problems that will take....years.....to solve by individuals, businesses and goverment. The US Goverment has many tools and abilities at its disposal. However, you seem to feel that since no silver bullet exists, the whole of the Obama administration is sunk. It simply shows how ignorant you have become over time since graduating from high school. There exist quite a number of tools and processes that the President could enact. HOWEVER, he, unlike you, reconizes that such power must be handled with an even higher degree of responsiblity.
The information regarding the American Recovery and Reinvestment Act of 2009 clearly shows the economy not only stablized from the free fall it was in starting sometime in 2006 to 2009; some of the industries started to rebound. The rate of growth across all sectors has been painfully slow. However, many well educated folks on the subject have pointed out that if the US Goverment had kept the demand curve artifically inflated for another year, with about $450-550 Billion spent (similar to the amount spent in the two years previously of the ARRA), the economy would be on a proper path to recovery. Now who do you think, Yachtie, did not want the US economy to recover, US citizens to obtain work and start paying down the US Debt while zero'ing out the budget? Who would have the most to lose in a 2012 election if that third year was approved of in a lame duck session of Congress? Here's a Hint: Their Logo is an Elephant.
And before you try to reply, did you honestly and seriously read through the whole of the American Recovery and Reinvestment Act of 2009?
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