Obama begging bank to get money to Main Street

[Robor]

Corporations don't have any "obligation" to help anyone. They are out to make money. Nothing more, nothing less. Believing that the banks think they owe the taxpayer anything is incredibly naive.

Also, banks did not get bailouts because the government wanted to help them, they got bailouts because the government feared even bigger problems if they failed. Again, it's a business decision, and to think that some big corporation leaders would be thinking "oh, I'm so thankful to GWB and Obama for bailing us out, we must reciprocate with acts of kindness and sacrifice!" is idiotic. They continue to make the decisions that they think will bring the largest profit.

If the bailed out corporations were 'too big to fail' then they need strict regulation and harsh penalties to make sure this never happens again.

 

[Robor]

What I don't get is, a big part of what has gotten us to where we are now is the fact that people spend more than they make, they accumulate debt and are now in a tough spot with no easy ways to dig out of the hole.

Banks evaluate giving someone credit and do so based on the risk/return evaluation. Pushing banks to lend more than that is just pushing them to be irresponsible and loan money to people who won't be able to pay it back.

Why does it have to be more lending? How about helping homeowners that are under water and/or in bad mortgages? How about lowering interest rates/penalties on loans and credit cards?

 

[Jhhnn]

Your extension of my argument is absurd, glenn1. Might as well argue for hunting, gathering and pillaging wrt to to a vast % of the population. Reductio ad absurdum isn't a valid argument.

Nor is GenX87's remark wrt cubicles relevant, either. Cubicles are cheap and easy to relocate, by design, and what we're seeing is an outsourcing of any kind of work where the worker doesn't have to actually touch a physical product, a thing, to work with it. Call tech support to get an idea of where customer service is headed, for example, realize that a great deal of engineering, medicine, accounting, whatever, can be done from remote locations. It already is, just in a more localized fashion.

The only safe jobs are owning necessary services and performing them, and there certainly aren't enough of those to go around. Somebody has to drive the bus and fix it, even if it was built in Germany. Same for fire protection, law enforcement and all kinds of service sector jobs, from cleaning the toilets to owning a mom and pop laundromat to being an executive of a giant financial institution or serving as a repo man.

Contrary to what Righties contend, the Obama Admin isn't "Leftist" other than from an extreme Right perspective. They followed though on The Bush Admin's bank bailout, for example, rather than just socializing the bastards, as was done in Sweden some years ago. They're following through in terms of foreign policy, monetary policy, and taxation, as well.

And what the leadership of the modern conservative movement really wants isn't what their followers think it is, either. It's not about preserving America, at all, but rather about restoring the Ancient Regime of haves (basically nobility) and have nots (serfdom, with a modern twist, debt-slave suckas). That's occurring on a global scale, with actual ownership of anything except worn out crap becoming a privilege of wealth. Own your own home? Heh. Hardly, particularly when you have negative equity and you're paying on an endlessly refinanced mortgage. Own your own business? What does that mean, exactly, when you rent the premises and you're dependent on borrowed money to keep it afloat? What does it mean when a very, very few inheritances are expressed in terms of tens or hundred of millions, even billions, and the rest are such that the inheritors have to borrow the money to bury the deceased?

As income and ownership have shifted to the top, a result of reaganomics, the logical answer would have been to raise taxes at the top to maintain governmental solvency, thwart that process. Which didn't happen at all. Successive Repub Admins and Congresses simply substituted governmental debt for tax income and much the same for the middle class, as well.

The real leverage that any govt has over their bankers is regulation. Which all sounds peachy, except when the system has been rigged in such a way that the bankers are holding the whole economy hostage, made possible by the consolidation of that industry into the hands of a very few players. Do what we want, or we'll crash ya- very simple, really.

It's what righties voted for and supported for the last 30 years-blinded by greed and emotional appeal. Just be thankful they've decided to ease it in with a slow motion economic decline rather than slamming it home with a very sharp and deep depression. Go wave your teabags, dote on the every word of the middle aged Alaskan bimbo, never forget that teh ebil lubruhls and sochulists are out to get you, take away your dreams, your fantasies... The very things that have rendered you into suckers, chumps and tools of the ruling elite.

 

[StageLeft]

If the bailed out corporations were 'too big to fail' then they need strict regulation and harsh penalties to make sure this never happens again.

Don't worry, legislation is already passed to ensure it won't happen again, lots of laws. Here is a list of them:

 

[Robor]

Don't worry, legislation is already passed to ensure it won't happen again, lots of laws. Here is a list of them:

You forgot these...

1.
2.
3.
4.

:\

 

[Ausm]

You forgot these...

1.
2.
3.
4.

:\

I am not holding my breath on any meaningful reform when it comes to wall street. The idea of President Obama telling the banking industry to start playing fair is a joke. He tried it in March and he will get the same result this time. Bush's economic team can be blamed for the no strings attached TARP roll out.

 

[Miramonti]

Don't worry, legislation is already passed to ensure it won't happen again, lots of laws. Here is a list of them:

lol

 

[Patranus]

The banks were bailed out by the taxpayers of this country. Were it not for those bailouts the banking industry would have collapsed upon itself. Now you think they have no obligation to help the taxpayers? Well, fuck you partisan tool.

So the government tells banks that if they make loans that the government deems "risky" than the bank will be fined so they aren't making loans except those that are 100% guaranteed.

The government cause the banks to tighten their lending practices through all of this regulation.

 

[BlahBlahYouToo]

Isn't making loans to unqualified borrowers how we got into this mess in the first place?

 

[Robor]

So the government tells banks that if they make loans that the government deems "risky" than the bank will be fined so they aren't making loans except those that are 100% guaranteed.

The government cause the banks to tighten their lending practices through all of this regulation.

What regulation are you speaking of?

As I said after the post you quoated, why do they have to be loans? Why not assist through lower CC rates, less/lower fees, mortgage assistance, etc?

 

[soulcougher73]

Isn't making loans to unqualified borrowers how we got into this mess in the first place?

There is no room for facts or logic here. Move along..nothing to see

 

[irwincur]

If the government tells banks that they have to lend money - look for another big crash. This time, the banks and their remaining capital will most likely walk as well. There is no way the government should be telling the banks who to loan money to. Like the government knows... They are the worst creditor in the world.

 

[Fern]

The banks were bailed out by the taxpayers of this country. Were it not for those bailouts the banking industry would have collapsed upon itself. Now you think they have no obligation to help the taxpayers? Well, fuck you partisan tool.

Every time I see something about the government extorting banks to make more loans I think I'm watching another cycle start, and I see why banks are reluctant.

Yes, they (some big ones who don't make many loans to small businesses anyway - whoever got a loan from Goldman Sachs?) were bailed out. But at what cost to us and them? Our cost is the money we'll eventially have to pay in taxes. Their cost is more villification by the government, and more government power over them telling them how to run their business and what salaries etc they can receive.

Isn't this a cycle?

Didn't the banks get into the problems by the government telling them they needed to make home mortgage loans more available? So the banks did that and then when it (inevitably) blew up weren't the banks villified by the gov, and put under it's thumb?

Why would bankers now listen to the government when it tells them to start loaning more money now. (By "now" I mean under this economy and uncertainty, who wants to bet which loans will be secure?). What appears to be the probable outcome? More bad loans, more villification by the government and being put even further under it's thumb.

Look, if the government were even remotely serious about easier credit for small businesses to get the economy going they should use the SBA. The SBA guarantees loans made to small businesses by banks. So have the government fund and direct the SBA to step up. What's so freakin hard about that?

I don't see where this administration or Congress is remotely interested in helping small businesses. Money for Wall Street? "Here's a trillion boys, by the way, be sure to see my fundraisers on your way out". Nope, they're trying to lay that responsibility off onto the regular bankers who know too well when it blows up they'll get pounded again.

Edit:

Isn't making loans to unqualified borrowers how we got into this mess in the first place?

This^

Fern

 

[werepossum]

Neither the fundamentals nor the laws that caused this crash have been changed, so banks would be foolish indeed to return to the practices before the crash.

Very good point regarding the SBA.

 

[Darwin333]

And to extend your mindset, why not try to maintain the U.S. position in subsistence farming for those with below average education and skills - after all, that's about all that vast numbers of inner-city dropouts can handle.

But to answer your question, even if we did exactly what you proposed, those manufacturing jobs would STILL go away because of the high cost of labor here (in relative terms to other countries). Even if you could somehow ban imported goods, the higher labor costs would price many U.S. manufactured goods above their marginal utility value for many consumers.

Exactly how is that different from any other job? Are Americans somehow more intelligent by birth than everyone else in the world?

You can make a case for better trained and maybe better educated (albeit a hard sell on the educated part) but we are already seeing huge floods of well educated and trained cheap foreign labor. We are already shipping all of our IT jobs to India and we are sending more of the design jobs to them everyday. China absolutely LOVES when we come up with something new because they couldn't give half a damn about copyright laws and there is no shortage of people willing to buy knock offs.

How long do you really think we can stay ahead of the curve at this rate? How do you think we can maintain our lifestyle when equally educated and trained labor enters the market at half (or less) of the rate we are willing to work for (not to mention less regulation costs, benefits, insurances etc..)?

 

[Fenixgoon]

Isn't making loans to unqualified borrowers how we got into this mess in the first place?

that's exactly what i thought when i read about this in the newspaper.

 

[Jhhnn]

Isn't making loans to unqualified borrowers how we got into this mess in the first place?

Not really. That was made possible by the consolidation of investments, insurance, and banking into the hands of a few, followed by relaxation of reserve requirements, capture of the rating agencies, securitization and derivative hedging to make the whole thing seem safer.

Not to mention the Bush Admin shoving risky mortgage securities down Fannie & Freddie's throats through the agency of HUD.

Mortgage middlemen were scamming both the buyers and the investors, making a killing off the cash flow. Those middlemen got caught holding a lot of really sh!tty paper they'd intended to offload before investors wised up, and hedges that they couldn't have collected or made good w/o federal funds. They knew their paper was crap, and they also knew they wouldn't be holding it for long, except that investors caught on, wouldn't buy... locked up the pipeline, left banks holding the bag, or at least enough of it so that banks' butts were hanging out in the breeze.

 

[bfdd]

This is why the money should have come with more strings.

That's something I didn't understand. I was against giving anyone any money to stop their failing business, but they decided to do it anyways. So why didn't they do it the smarter way? Banks were hurting because they lent a ton of money out and it wasn't getting paid back. The government steps in and gives the bank money to cover the money they loaned out, but didn't think to say "but you have to wipe this much debt from the people who owe you money." Then you have a zero sum. Example bank loans you 10k, when you pay them back it should be 15k, bank is going under because you can't pay it back they say "we need the money because we're going to go under if we don't" the gubment says "here's 12k, clear the debt and you can get the money." Why didn't that happen? I mean if we're just going to hand them basically free fucking money why didn't they do anything to help the people who were WAY under? I am so fucking glad my debt isn't even half of what I make a year.

 

[Patranus]

That's something I didn't understand. I was against giving anyone any money to stop their failing business, but they decided to do it anyways. So why didn't they do it the smarter way? Banks were hurting because they lent a ton of money out and it wasn't getting paid back. The government steps in and gives the bank money to cover the money they loaned out, but didn't think to say "but you have to wipe this much debt from the people who owe you money." Then you have a zero sum. Example bank loans you 10k, when you pay them back it should be 15k, bank is going under because you can't pay it back they say "we need the money because we're going to go under if we don't" the gubment says "here's 12k, clear the debt and you can get the money." Why didn't that happen? I mean if we're just going to hand them basically free fucking money why didn't they do anything to help the people who were WAY under? I am so fucking glad my debt isn't even half of what I make a year.

That did happened under the Troubled Asset Relief Program. What is being discussed is NEW lending and freeing up the credit markets.

 

[Jhhnn]

The money, bfdd, went to pay off a whole round robin of derivative bets and to create reserves for the banks, who were caught in a squeeze of their own making. They didn't have any reserves to speak of, and most of the mortgages had already been securitized. Investors took a huge hit, and still are, as banks acting as mortgage servicers wring out every dime they can via foreclosure fees... "Investors" being pension, 401K and other funds... first they beat the cash out of buyers, now they're beating it out of investors.

 

[bfdd]

Jhhnn that's fine, but they were still hurting because of the defaults. no one is making money off people who can't pay their bills and this was a problem. i don't understand how the stipulation to clear debt for american citizens equal to the amount we gave a certain bank wasn't there. we paid them to keep paying them....

 

[piasabird]

Just have the fed raise the prime lending rate for the banks to 10% and for everyone else just 2%.

 

[bfdd]

Just have the fed raise the prime lending rate for the banks to 10% and for everyone else just 2%.

i wish i could get money at the interest rate banks do.

 

[Jhhnn]

You're not thinking this through, bfdd. The vast majority of bunk loans were already securitized before the crap hit the fan, and banks who securitized those loans to investors are the servicers, with all kinds of stipulations as to the fees paid by investors for that service.

When any particular loan goes bad, the bank charges the investors for foreclosing and reselling at a loss. Investors eat the fees and the loss. The bank makes more money in the short run from foreclosure than they do from people who actually pay their mortgage, beat the cash out of what they'd necessarily have to pay to the investors otherwise.

It's easy to tell if the bank still holds the mortgage- they'll negotiate. If it's part of a securitized mortgage package they service, they're merciless.

Capische?

 

[bfdd]

Jhhnn... did entities who held mortgages that were hurt by the housing bubble bursting or credit bubble bursting get money from the government to prevent them from dying? if the answer is yes, then like i said how come it didn't come with a stipulation to pay off personal debt to those entities?


btw i realize not EVERYONE who got money from the gubment as a bail out was hurt because of those reasons, but the ones that were should of had that stipulation tacked on.