Yet more proof that the average American is clueless when it comes to economics

[Fern]

I cant wait to see how thay argue this. What do you think about tax breaks for some of these companies on the government dole? The tax break proposed for one company would in fact make the payback of the government loan free.

Yeah, check out my recent post in the Citi tax break thread. If you're interested, I think I spelled that out clear enough for even non-finacial professions to follow how we're getting ripped off.

Fern

 

[ProfJohn]

And some facts for PJ who won't show up in this thread again...

1. Not from what I have read.
2. It would have been bad, but not "total disaster" as the fear mongering we were led to believe.
3. The "recent improvement" has been the only improvement. Banks are still not loaning, btw.
4. We had a "strong" banking system just before the crash. How many were recommending financial stocks a year before the crash?

1. Apparently this item is still up for debate, I had thought that we were going to make a profit for sure, but that might not be the case. Plus it depends on whether you include AIG and Fannie and Freddie. (I would include AIG, but not Fannie and Freddie since they are a different mess)
2. Your statement is interesting especially in light of the fear mongering used by Democrats to pass their $700+ billion stimulus package.
3. Lending and the availability of money has improved since the bank crash. It may not be a huge improvement, but remember that in the middle of the crisis it was hard as hell for anyone to get any money at all. Also, if the loaning of money isn't important then why is Obama out there talking about the need for banks to lend more money to 'main street' America?
4. We THOUGHT we had a strong banking system prior to the crash. During the crash we realized what a mess the banking system actually was and via the 'bailout' we were able to clean up some of that mess and get the system running the proper way.

And for the record my main complaint about Julie's comment, and those of people like her, is that they complain about the how wall street was bailed out while others suffered without acknowledging the fact that without the bailout the number of people who would have suffered would have been FAR greater.

 

[werepossum]

1. Apparently this item is still up for debate, I had thought that we were going to make a profit for sure, but that might not be the case. Plus it depends on whether you include AIG and Fannie and Freddie. (I would include AIG, but not Fannie and Freddie since they are a different mess)
2. Your statement is interesting especially in light of the fear mongering used by Democrats to pass their $700+ billion stimulus package.
3. Lending and the availability of money has improved since the bank crash. It may not be a huge improvement, but remember that in the middle of the crisis it was hard as hell for anyone to get any money at all. Also, if the loaning of money isn't important then why is Obama out there talking about the need for banks to lend more money to 'main street' America?
4. We THOUGHT we had a strong banking system prior to the crash. During the crash we realized what a mess the banking system actually was and via the 'bailout' we were able to clean up some of that mess and get the system running the proper way.

And for the record my main complaint about Julie's comment, and those of people like her, is that they complain about the how wall street was bailed out while others suffered without acknowledging the fact that without the bailout the number of people who would have suffered would have been FAR greater.

Valid points. Whether the original Republican plan to have government eat the toxic assets is better or worse than the Democrat plan to have government eat the companies, we came very close to a ripple affect leading into another Great Depression. I just wish the two parties would get together and fix the underlying problems instead of just throwing money at the results. None of the underlying problems have been addressed, and you'll notice that Fannie Mae and Freddie Mac are not even subject to the same caps on earnings and bonuses as are the government-owned companies, even though they are both GSEs and were both bailed out big time.

 

[Jhhnn]

I'll agree, PJ, that the suffering would have been a lot greater w/o the bailout. OTOH, if you think that the banking system is running properly at this point, you're a potential buyer of Arizona oceanfront property... there have been no statutory changes to inhibit a relapse into the kind of banking behavior that put us into this mess, none at all. For banking execs, the rewards of excessive risk taking remain huge, the penalties non-existent. The new catch-phrase on Wall St? "IBG"- "I'll be Gone" when it all falls apart, rocketed into the financial stratosphere. The investors? the stockholders? the borrowers? the bank itself? So Long, Suckers.

 

[Fenixgoon]

the problem with part #1 is that regardless of how much profit is made, taxpayers will NEVER see that money, EVER.

as for the rest - i think at least to some degree, the problem is not with the bailouts so much as it is the lack of restrictions - congress handing the banks a blank check vs. making the automakers go through hell to get literally less than 1% of TARPs' value.

reading TIME's piece on Bernanke as person of the year, his decisions do make sense (at least based on my econ classes). it's just the manner in which they were performed. just like when you're talking with someone - it's not so much what you say (do) but how you say (do) it - and that's why lots of people are pissed.