Too big to fail...

[Special K]

I do believe that most of the money given to the banks has been paid back, correct me if I am wrong about this.

Bailing them out creates moral hazard that will only encourage more excessive risk-taking in the future. Do we really want to have another recession of this magnitude every few years?

 

[ProfJohn]

Bailing them out creates moral hazard that will only encourage more excessive risk-taking in the future. Do we really want to another recession of this magnitude every few years?

The moral hazard is in bailing out mortgages for people who made bad choices and are in return being given a free ride via our government.

The banks on the other hand are paying back their loans and thus aren't profiting off their mistakes in the same way individuals are with their mortgages.

Also, we can prevent a repeat of this recession by enacting some smart banking laws that will restore some common sense to the industry.

 

[brencat]

I think there's a larger point you're missing because of too narrow a focus, and because of the common misconceptions as to who's rich and who's not.

Increasingly, over the last 30 years, it's been the investor class who's reaped the benefits of our society. Changes to the tax structure, offshoring, financial "innovation", and the purposeful weakening of Labor have shifted income to the tippy-top, and have shifted the source of income from work to investment.

Perhaps we've gone off on a tangent here. It was predictable that as a greater % of our population went to college and took finance and economics courses and learned that investing was the key to comfortable retirement and wealth beyond the basics, that investing would become a priority activity. I'm happy many people invest these days and not just the rich as before.

What you're saying about the 0.01% income brackets may be entirely true -- makes perfect sense. Once you have $10 million in the bank, why risk any of it? Put it all in munis and live a comfortable $250k - $400k tax free lifestyle on the annual interest alone (ask John Kerry and his wife). Of course those with $300 million have considerably higher lifestyles as expected.

Maybe what you're not realizing is that these "top 400" people would have this kind of wealth regardless of the current tax structure. In other words, the super rich will always be rich, and always be part of the investor class. Socialites and inherited wealth don't need to work if they choose not to. Nothing is going to change that.

Anyway, my response had nothing to do with these super wealthy lazy trust fund brats. I was simply pointing out that we used to take responsibility for our actions, pay off our debts, and own up to and correct our problems (at least most of us). Now, my debt is apparently your problem. So is my late mortgage. And my success. And my income disparity relative to yours.

The banks blow themselves up, people take out huge mortgages they have no hope of paying back because interest rates are stupidly low, and we give them all a bailout because we can't bear the thought of the economy self-correcting and weeding out the wheat from the chaff, and taking some innocents with it. This is nonsense! Is the country better off trillions more in debt after the bailouts and socialization of losses? More importantly...what happens NEXT time down?

 

[dawp]

The moral hazard is in bailing out mortgages for people who made bad choices and are in return being given a free ride via our government.

The banks on the other hand are paying back their loans and thus aren't profiting off their mistakes in the same way individuals are with their mortgages.

Also, we can prevent a repeat of this recession by enacting some smart banking laws that will restore some common sense to the industry.

those banks were giving out mortgages to people who they knew would never pay them back.

 

[Siddhartha]

the problem is american is too big a pussy to let anyone fail today. Everyone gets to win/a handout.

I say if an entire school gets an "F" level, fuck them...all those teachers and the failing students are out. if they can't afford to live, deport them to the country of their choice, one way ticket.

cheap and effective.

This is another great example of Reagan Era thinking.

 

[alkemyst]

I do believe that most of the money given to the banks has been paid back, correct me if I am wrong about this.

Well there is a bit more to it than that...one they were able to use that money at more of a risk since it was free and two (which most people miss) is they paid it back because it was going to give the fed too much insight into their books.

Sort of scary, also if they could pay it back so quickly it's obvious they didn't really need it.

 

[alkemyst]

This is another great example of Reagan Era thinking.

Has nothing to do with Reagan, Dem/Rep, etc thinking.

Look at where most of these F schools are...look at the people going to them and teaching there. If no one wants to work, remove them.

If any of the students are doing well, move them to another school...too bad if they have to ride a fucking bus.

We really need to stop college being an extension of high school. It's made the Bachelor's and even Master's in some fields worthless.

It's also sad what is not being taught today, I needed to know how many centimeters something was. The guy being the counter admitted to "only being a sophomore, and still had two years of college left" when he thought 9 inches was about 4 centimeters. Even tried to prove it with the tape measure he was using.

It was a framing tape.

 

[alkemyst]

Monopolies weren't bad in and of themselves, but what began happening was unfair practices...for some things a monopoly makes sense.

The main problem with the phone company was how much they cooked their books. There is an excellent (and short) book by J. Edward Hyde called the Phone Book. It's older, mid 1970's...but a good read.