White House: All your banks are belong to us

[MovingTarget]

Originally posted by: cwjerome

Originally posted by: MovingTarget

Originally posted by: cwjerome

Originally posted by: MovingTarget

Originally posted by: cwjerome
If the major national banks failed this world would turn into pure shit depression in about 3 days. Get real. This is not just a business.

I'm all for GM and other businesses going bankrupt but the banking/financial system is a vital national security issue and must be safeguarded. Throwing money at them and bogus stimulus packages won't work effectively and sets a disastrous precedent. To hell with rewarding these assholes for failure. If a major bank has screwed up so bad then the government should step in, clean house, reorganize, and auction off.

How is our waning industrial base not a matter of national security? I'd say that our manufacturing capacity is one of the hallmarks of American military power. To let it evaporate would be insane.

I would argue that we are still industrially powerful and that such industry can be quickly ramped up if need be. (And you cannot be suggesting our military industrial complex is in a lax state... are you?) The fact is there is no need to take drastic action because we face some crisis over our manufacturing capability, because we don't. We need to face the issue at hand.

Our financial system trumps all because it's the foundation and fuel for the economy at large. GM could die tomorrow and our economy would drive on after a minor hiccup. If our banking/financial system were to die it would set off a chain of events that would rip this nation apart. Every business in this country would fold or lose at least 50% of its value and the world would see the worst depression in history.

I would say you better get your priorities straight.

We still are industrially powerful, but if the domestic auto industry goes belly-up, that would be a significant blow to our industrial dominance. Our MIC as a whole is top-notch, but should the shit really hit the fan, it is the heavy industry now used for civilian purposes that really determines our strength. It is this latent capacity that we use to ramp up military production in a real time of war. We don't want our heavy industry to be beholden to military production. That would be dangerous.

I also disagree on your assesment of the financial sector. It is not the 'foundation' of our economy, merely the grease in the wheels of the economy. Without it, everything stops, but it cannot drive our economy alone. You cannot build any sort of economy purely off of finance. Sure, GM could die, but heavy industry is not an efficient market. Once it is gone, our industrial capacity will take a LONG time to recover, especially once their suppliers start closing up shop. We can keep them going for now, but eventually GM will have to be split up. Those calling for bankruptcy have no idea what they are really asking for.

My priorities are straight. It is that kind of "Wall Street first" thinking that is screwed up.

OK... so do you believe industrial manufacturing is on the verge of collapse? Or just making a point that it's as important as the financial sector? Other than disagreeing with me, I'm not sure what you are trying to say.

On one hand you say the financial sector is not the foundation and in the next sentence you say that without it, everything stops. So which is it? Nothing can "drive our economy alone" so I don't know where that's coming from, but you seem to admit that without monetary stability, access to credit, and all the other things the financial sector provides, a free market cannot function. That's my point. Finance and banking doesn't need GM but GM needs finance and banking.

Every major depression in US history was mostly the result of the finance/banking sector taking a huge shit... and this has the potential for being the worse. You can call it "wall street first" thinking, but I call it simple common sense.

Perhaps I should've clarified. I was just making the point that manufacturing is just as important as the financial sector. Too many politicians seem to think that Wall St. reigns supreme, when in fact it is only complementary. You cannot enact policies for the sole benefit of wall street and completely ignore industry. You can have a completely healthy financial sector, but they are not what generates real wealth. Credit is what "greases the wheels" so to speak to keep industry from freezing up. When the economy flourishes, wall street does so as well. As we have seen lately though, the inverse is not necessarily true. Hence, "Wall Street first" thinking is not necessarily the way we should go about getting our economy back on track. That is part of what got us into this mess.

Every major depression has been when Wall Street takes a hit, true, but from what I've seen it seems to be self-inflicted. Wall Street takes a hit, then the rest of the economy, the part actually generating wealth, jobs, etc. comes to a hault. Fix Wall Street, but if you ignore industry, the economy will remain at a standstill and we will be in a bigger hole than we started. Letting GM and its associated industries die will eventually lead to Wall Street having the same fate.

 

[chess9]

Originally posted by: piasabird
Rick bankers just buy homes in Florida where their primary home is protected under the law from bankruptcy. That is what Madoff did with a lot of his money. 50 million $$$ house. Sister 50 million $$ house wife 50 Million $$ house. All protected from bankruptcy.

A Citibank executive lives across the street from me in a very nice home. He bought it two years ago. He's now spending a lot of time down here. From what he's telling my brother Citibank is very close to folding, even with the bailout money. So, if the bank fails after we've given them billions, how stupid do Paulson and Geithner look? I bet we lose every penny we put into these banks.

-Robert

 

[palehorse]

More attribution, oversight, and regulation = OK.
Total government control = NO FUCKING WAY.

Originally posted by: chess9
I bet we lose every penny we put into these banks.

Yep.

Every dollar allotted for TARP, the Auto Bailout, TARP II, the Auto Bailout II, Stimulus Package I, Stimulus Package II, and the Mortgage Fix is a total f'n waste. We might as well soak the money in gasoline and light a match...

 

[cwjerome]

Originally posted by: palehorse
More attribution, oversight, and regulation = OK.
Total government control = NO FUCKING WAY.

Why not?

I just noticed this article today and it covers a lot that I agree with.

From the article: "There's another reason why the concept should appeal to (fiscal) conservatives, he explains. "The idea that government will fork out trillions of dollars to try to rescue financial institutions, and throw more money after bad dollars, is not appealing because then the fiscal cost is much larger. So rather than being seen as something Bolshevik, nationalization is seen as pragmatic. Paradoxically, the proposal is more market-friendly than the alternative of zombie banks."

In any case, Republicans must now temper their reactions, he says. "The kind of government interference in the economy that we saw in the last year of Bush was unprecedented. The central bank -- supposed to be the lender of the last resort -- became the lender of first and only resort! With our recapitalizing of financial institutions, and massive government intervention in the markets, we've already crossed a significant bridge."

This road we're on of bailouts is stupid... the government will be controlling the big banks de facto anyway, and the drawbacks will outweigh the puny benefits. I say get in there and do it right.

I like what he says: "And the only way to do it is by essentially taking them over and breaking them up."

 

[alien42]

Originally posted by: frostedflakes
Wait, am I missing something? The article seems to make it pretty clear that they have *no* intention to nationalize the banks.

misleading and incorrect thread title FTL

 

[moparacer]

how stupid do Paulson and Geithner look

I dont know if I can really get mad at any one in particular over this crisis. Its easy to spread the blame all over the place....

Paulson Bernanke and now Giethner Inherited and sinking ship that dates all the way back to the Clinton years. What about Alan Greenspan? If anyone is to blame for creating it, he would have a large role....

If I were Geithner I would have politely refused the invitation to be the Treasury Secretary right now......

If the man can pull us out of this mess his picture should be placed on the 100 Amero Bill......

 

[Skyclad1uhm1]

If the major banks go bankrupt it means that all the companies who have money in accounts of those banks lose it, which in turn means loads of companies going bankrupt too, not to mention a lot of civilians with bank accounts there. So massive job loss as well as economic collapse. That's the problem with letting them fall over and die.

Just pumping money into them means the mismanagement continues. The only solution is to take control, kick out the incompetent corrupt people (with other words: all the managers and CEOs), and put some people in charge who have proven themselves in the past.