Bailouts have rocked markets all over the world in recent years, but here in the US, the Wall Street reform bill is making its way through the senate which would essentially end the "too big to fail" mentality.
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Just play this gem.....Loved it, almost as much as I love talk radio
Did you know “Too Big To Fail” is a new board game satire of the Obama Administration. The creator of the game told me one of the unexpected qualities of the game is it seems to act like a bugbomb for liberals. He claims he can clear a room of liberals in 20 seconds just by opening the box –LOL.
Go to their media page and download a picture of the board… I about busted my gut when I read the spot labeled “United Nations”. http://www.toobigtofailgame.com/media.html
I think it is high time the Senate considers such measures
I think it highly satisfactory and timely that the Senate is considering such a measure
i think banks get incentives better ratings if they 'provide' houses to those that don't have, and actually get bad ratings if they don't provide housing, with fed rates low, and in that time with increasing home ownership, with the government saying housing increasing by 3% when the fed increases it rates who gets to blame? how come you never hear the buyers getting blame, buying something they can't afford? what would have happened if these 'people' never got those mortgages for houses they can't afford? where would we be? what would have happened if 400,000 people said to theirself 'no. i'm sorry. i don't have the money for that house, and never got those mortgages'? would things be better off? would we be in better times? would we have been happy if they didn't buy something on credit they couldn't pay for? would we have more jobs available right now if they didn't get those mortgages?
If an icecream man sells icecream on credit and his buyers can't pay him when he comes to collect, is it the ice cream man's fault? should he be sued? or should the people be sued?
John's comment to Jim (28apr10 at 13:21:27)is the best of all. I hope everyone reads it.
The Titanic was too big to sink, we all know how that turned out.
the battle of john and jim. all i know how to do is trade, ask me to liquidate a company, i've got no experience there buddy. ask me to drop a multibillion dollar company, create businesses that provide jobs for 1 mil +, i've never done that. you know who knows? a capitalist. ask me to create a good that everyone uses, ask me to be the inventor of a computer! awsk me to make a snickers. shoes. cars. the internet. bottled water. pillows. furniture. cologne. shirts. flash drives. laptops. fans. air conditions. houses. doors. glasses. lava lamps. watches. buildings. ask me to do that. i don't know how to. you know who did? a capitalist. ask me to create an insurance company, a public park, a bank, the technology for cinemas, build a company that develops medicines for every illness under the sun, ask me to create a system that provides water to every home and light by the turn of the wrist, and a system for them to get from here to there whether by railway, car, foot or air. i never did that. but you know who did? a capitalist. where do you sleep? the hat that you wear, the keys that you hold, the lip balm, the lipstick, the cd's you listen to, the mp3 player you have, the dvd player you have, the cell phone you have, i didn't create that, i don't know how to, if i did i would have created it by now. but you know who did? a capitalist. it's funny, this is the thanks that people get, they're quite grateful huh? as i said if i knew how to do it i would, but for the man of ability. to me just seems that public is entitled to something that they have no ability for, if they had the ability they would be doing it by now.
never try to pretend that you are more important than you really are - m rothschild
opinions are like a**holes, everyone has one (including me) lol enjoy your weekend guys, who cares, whatever.
John II, I cannot agree that our system is “semi-socialist” as you say. Of the $797 billion bailout provided by the Bush administration, did ANY of it go to the average citizen? No, it went to the largest banks. Did the 'cash for clunkers' stimulus go to citizens? Yes, to slightly reduce the cost of buying a new car, however, the substantial profits made on those purchases went to the auto makers and the banks who financed them (same for the appliance rebates.) the vast majority of the gov't handouts has gone directly to the largest banks and corporations. This is properly known as corporatism, or fascism as it was known in a previous era, not socialism. Government and corporate collusion wrongly re-defined, just another nifty con-job by the financial mercenaries to make you think the have-nots were benefiting.
Since you have returned to extolling the ideal of capitalism, I'll address what I see as your main point.
You said: “Only in a free political system can a free economic system exist. They go together.”
No doubt that's what you were taught but have you ever considered what is taking place in China? Run by a hard line communist regime and yet rapidly becoming a leading international economic engine with an expanding middle class of people who earn relatively good disposable incomes and are free to purchase many products from around the world, own businesses, invest their savings and are now being encouraged by their gov't to buy gold. Yes, there are tightly regulated state owned banks, but the Chinese are successfully out-producing the rest of the world, capitalists included. And all that WITHOUT a parasitic financial sector. Sometimes what we are taught is not what it seems. I am against communism, but you can't deny the obvious.
It's true, the actions taken in response to the "crisis" are more like Fascism than Socialism, but I had in mind the more general environment, things like Social Security and the rest of the Welfare State. And the new health care system. Although, with the government taking ownership positions in businesses, rather than just being cooperative partners, the Socialist / Communist element is there as well.
I would be very careful about China. The government there could nationalize anything at any time, and back it up with tanks in the streets (Remember Tiananmen Square?) China is growing rapidly, but from a very low base, and it remains to be seen what will happen when the standard of living approaches that of the First World.
While the Chinese may be free to own some businesses, and purchase some foreign goods, they are not free to think and speak, or even read what they want. Just ask Google. China is no more a free economy than it is a free political system.
Whatever the cause (greed, corruption, poor business decisions, or bad luck), in a capitalist system they would have been allowed to fail.
In our semi-socialist system, they were gambling with our money, and we couldn't let their failure take us down with them. Bring back Glass-Stegall, or the Volker Rule, or whatever you want to call it, but if a bank takes government guarantees (FDIC insurance), they shouldn't be allowed to trade derivatives on a large scale, or make other risky investments. Companies that do that should do it with their own money (their shareholders money) and let them have the losses along with the profits.
But back to "greed". You said "aren't we really more interested in capitalizing on the efforts of others to increase our wealth than in expanding employment opportunities or increasing the income levels of the working class?" Of course, our objective is to increase our own wealth, not other people's wealth. But the essence of capitalism is that doing the one also does the other. If you don't get that, then you don't understand how it works.
Dictators and Kings increase their own wealth only by taxing their subjects, and often using force to do it because they give little or nothing in return. Capitalists increase their own wealth by providing others with the means to produce more, in return for a share of the increased production.
It's not a confusion of political systems with economic systems. Only in a free political system can a free economic system exist. They go together.
As for the grandness of the scale, I guess if you measure it in dollars, these latest scoundrels have the record. But what wealth, exactly, did they destroy? Derivatives are measured in "notional value", because there is nothing real involved. All the houses are still there, as they were before the crisis. No real wealth has been lost, only the notional value has changed.
Compare that to the non-cpaitalist scoundrels who have laid waste to the productive capacity of entire countries in order to satisfy their own greed. Where people who once lived more comfortably were reduced to squalor. Who did the greater damage?
Take away the "greed" - the desire for profit - and there is no investment and no increased production, and no wealth for anyone who doesn't already have it.
It's true that you'll never be able to eliminate human frailties, but removing "greed" - self-interest, profit motive - from capitalism will do harm to all of us, not good.
John II, My apologies if I somehow STILL haven't made it clear that my remarks are intended to illustrate how the fundamental element of greed in human nature is facilitated on such a large scale within the more arcane workings of capitalism (would you feel less annoyed if I used the term 'this economy' instead?).
You may find comfort in the knowledge that there have been greater scoundrels in other places, other times and other systems, but that doesn't persuade me to close my eyes to those here, now and in this system. To repeat, I did not say this system doesn't work, obviously it does, but the elements of corruption within it are just as obvious...the evidence is not hard to find.
You seem to confuse governmental systems, international politics, nationalism and freedom with my discussion of just one facet of our economic system – the financial sector. What you say is all well and good, but those are topics for another forum. This one is about whether the giants of this economy are too big to fail, and I simply suggested, as did John, perhaps better than me, in his previous post, that their greed and corruption should not be redeemed. If they fail then so be it.
This will no doubt be the most unpopular post in this forum because it touches on an element that, like the three monkeys, none of us wants to see, hear or talk about, namely human greed, mine, yours, everyones. It's universal in human nature and nowhere more prevalent than in the form of capitalism. It's the reason we are “investors.” Granted, we say greed is bad but it's “them” not us who are greedy. But truthfully, aren't we really more interested in capitalizing on the efforts of others to increase our wealth than in expanding employment opportunities or increasing the income levels of the working class? Labor is already too costly because it shrinks profits and that's bad for us as investors. We invest (gamble) in hopes that we win and take a larger share than the losers. Buy low and sell high...buy the rumor and sell the news...get in early, out before the blow off, and then let the buyer beware. It's all good as long as we take more than the faceless others whose failure is not our problem.
The capitalist system will always be corrupt, because we are unwilling to admit that we want everything we think is ours...AND...as much as we can get of everyone else's. The system is designed from the bottom up to legitimize the economic inequalities between classes, and we wouldn't want it any other way. The concept of redistribution of wealth is utterly revolting to those who possess the wealth and who will spend whatever it takes to maintain it, while those who have the least have no means to buy much of anything, let alone enough influence to change things, and that's just the way we like it. This holds true despite the fact that greater purchasing capacity among the lower economic classes only feeds the economy and promotes a bit more prosperity for all. For some reason (though it fits within the psychology of greed,) we aren't that interested in seeing others prosper, even if it might mean a better ROI for us.
On the macro scale, greed is the main motivation of the bankers, insurance companies, Wall Street mercenaries, mortgage brokers and other money handlers who produce nothing, but never fail to extract their tribute every time they touch someone else's money. It becomes apparent that the larger the entity, the greater the influence of greed and the greater the capability to manipulate politicians, regulators and the economy in general to their advantage. The Federal Reserve and fractional reserve banking systems are easily the most corrupting influence confronting the US economy today and will continue to be in future unless something is done to bring them under control. Forcing the Fed to open it's books and become accountable to the public is a start. Severing the cozy relationship between the Federal Reserve as the federal government's main source of debt based funding is a necessity if we are ever to put an end to the constant inflation of the money supply, which is the direct and incessant cause of the devaluation of the money we work for and try to save. Regulation is an ugly word. but the legal thievery committed by the banks and Wall St., as is encouraged by the current system has to be halted.
NO!, I do not have a miraculous alternative to capitalism because greed is human nature and any system is absolutely corruptible. I am a capitalist and an investor, but I won't close my eyes to the glaring, inherent problems within the system. I believe the best hope is to find and accept solutions that will prove to restrain our propensity for greed leading into the future. We owe it to succeeding generations.
Jim,
I think you're off base on most of that post, but I like it.
So, when someone is successful at what he does, and accumulates some savings, what should he do with it? Is it necessary that he give it all away? Can he not "invest" any of it, so that someone else can use the capital to increase the wealth of the society? There are no jobs for the "lower classes" except for that investment.
Speaking of classes, by the way, longitudinal studies of income have found that of all the people in the bottom quintile (20%) in income in any given year, about 95% of them have moved up 10 years later, and are no longer in the "lower class". Similarly, many of those in the top quintile are no longer there 10 years later. Our society, precisely because it is capitalist, is very economically mobile.
People come to our country just because of that kind of mobility. They can start at the bottom of the barrel, and have an excellent chance to have a far better life here under capitalism than they would have had elsewhere. What part of the essence of capitalism would you change, and not destroy that opportunity?
So bankers "produce nothing"? If not for the bank, where would you have gone to get the money to buy your house? Wander around rich neighborhoods looking for one rich guy to lend you the money? Or wander around middle-class neighborhoods looking for 500 guys willing to each lend you a part of it? Banks perform a very necessary and valuable function in bringing borrowers and lenders together. Likewise for all the other "produce nothing" professions you mention. If they didn't do anything useful, nobody would bother doing business with them.
The real economic benefits come from competitive markets. In a competitive market, there is no "economic profit". The price is set by the market so that whatever is produced is sold, and if there is any short-term profit the participants adjust their behavior to capture it, and in so doing, eliminate it. You're heard of arbitrage? That is exactly what happens in competitive markets everywhere.
Competitive markets allocate resources to their best and highest use, and result in the highest wealth creation possible for the society as a whole. Truly free markets will tend toward competition. Innovation is the way for a producer to avoid competition, and operate in a monopoly or oligopoly where his profits are higher, but absent force, imitators will always appear, and will create competition.
Capitalism is the only ecomonic system that permits free markets and competition. Of course, it also permits abuses, and the role of government is to police the abusers. Whatever government does beyond that reduces freedom and wealth production.
What you call greed is the effort to innovate, to offer something different and better than the competition, and thus to earn more profit. Without that, who would make the sacrifices required to invent new technologies, and find better ways of doing things? Who would work 100-hour weeks with no prospect of a better life for himself and his family? What would have happened if Intel had decided that 100 Mhz was enough, their profits were high enough, and they didn't need to invent a faster microchip? What if nobody had wanted to lend money to Intel, or buy their stock? You can say the same about every successful company, they have all done things to improve our lives. Why do you think those things happened in the US and not Russia, or China, or Germany? Because of capitalist "greed", that's why.
It is government that needs reform. The politicians are corrupt. The rules needs to be changed, but with the politicians making the rules, I'm afraid we are doomed to live with the abuses.
John, if you have a need to defend the IDEAL of capitalism, you are welcome by all means! I didn't say it doesn't work. I was referring only to the high degree of success of the many who, driven by greed,find it irresistible and profitable to use corrupt and unethical means to achieve their goals, not the least of which methods include pocketing the best politicians money can buy.
The system does accomplish by fits and starts many of the things you champion, but if in return I listed all of the Enrons and WorldComs or Madoffs, layoffs by the millions and the misery suffered by the workers and their families thru no fault of theirs, lost homes, retirement hopes and dreams destroyed and on and on, the list is very long and we could debate forever. I laid the blame at a fundamental dysfunction of human nature – greed. If you are faultless, I salute you! The rest of us still have some work to do...
Jim, I agree with you 100%.
Furthermore, let's not be fooled by words (labels) ALONE such as capitalism, socialism, dictatorship, etc.
What really matters is the QUALITY of the leadership beyond the political system. For example, I would prefer the semi-dictatorship of Singapore because of their wise leadership to their own people and country. Compare Goldman Sachs attitude that pretty much represents American corporations that has become obsessed with greed and materialism at the expense of the masses... To them "winning at any cost" has become their highest priority. Unless there is a change in that kind of attitude and put our nations COLLECTIVE interest first, materialism is going to kill capitalism as it is now practiced in our nation. Btw, I don't see ANY difference between Democrats and Republicans... wait a minute... Republicans are worse from what I remember since 1992-2000! And I'm not neither a Democrat, nor a Republican! God forbid!
Another John has joined the conversation.
Jim, I defend the practice and record of capitalism, not just the ideal. Many people driven by what you label as "greed" have achieved their wealth without resorting to unethical, illegal, or immoral acts. Many of them are among the most generous philanthropists in the world. Who in China or Russia or Germany gives as much to the less fortunate among us as Bill Gates and Warren Buffet? That is the history of American Capitalism, from Carnegie and Rockefeller to the present day. It is a record of generosity and compassion that is unmatched anywhere else in the world.
ENRON, Worldcom, and Madoff? I'll put them up against Stalin, Mao, Hitler, Pol Pot and Ho CHi Min any day. How many millions lost their homes and jobs, and indeed their lives, under other economic systems?
Greed is not unique to capitalism or the US. What is unique to capitalism and the US is freedom. Our system is responsible for lifting millions OUT of poverty. That includes the workers, not just the owners and investors. If you want to hang Bernie Madoff, I'll send you the rope. He is not representative of the system or 99% of the people who live and work in it. He was no capitalist, just a crook, no different from any other thief except he didn't use a gun.
The regulators are to big headed to fail. They should be in jail.
While the bankers have caused the majority of the economic problems, the brunt of the damage has been felt by others that also have been "bailed out" and are now returning to viability, such as GM. After the shock of nearly loosing it all and coming out second fiddle, I bet they are sobered up, leaner and hungrier from the experience and likely to change their thinking and come back strong, a very positive for the economy.
On the other hand, if you don't force bankers to change with tough regs, what's to stop them from screwing over the economy yet again? Let 'em fail, let 'em go look for more useful jobs elsewhere.
Too big to fail is too big. Senator Sherrod says he will offer an amendment to prohibit any company from having assets > 2% of GDP. That's still way too big for any one company, but at the time of the crisis the top 6 banks assets were 60% of GDP. Or so they said. That's just ridiculous. Even worse, when you think that their net worth was close to 0, so their liabilities were that big, too. It's the liabilities that caused the problem, not the assets.
Canada and the US each collect enough tax to run the country-- it's just that so much tax revenue goes to paid the national debt. So I say let's quit paying the debt -- you know who'll get burned all the scum bags that got the bail out money.
I challenge any and all politicians in either country to show us where we signed for them to borrow money in our name. If they can't then screw the Banks for a change -- Quit paying the Debt, If we skipped that we'd have enough fund all our needs.
Unfortantely the say the legislation will get rid of to big to fail but it will likely make it more likely to continue to have bigger companies that are to big to fail.
I believe the financial institutions should have been bailed out because of the chaos that would have resulted otherwise but the people responsible for the mess should be held accountable.
Oligarchy,the club is exclusive,let capitalism work for all Americans,not for the masses and socialism for the few at the top at our expense
Hi Ainsleu:
Remember ; There is nothing wrong with Socialism, as long as the other guys money doesn't run out.
You are right, we've yet to get the truth about the timing and underlying purpose of the Goldman hearings. When all else fails, shoot the messenger.
H
What are the pros of letting them fail and what are the cons of letting them fail?
Pipsniper made the only meaningful comment. He is exactly right. When the Counry of Greece fails, will they be allowed to go bankrupt? Not likely! The US Government is likely to fail soon and be in dire need of a bailout from China. We should adjust our thinking accordingly. When it is us that needs a bailout, will we refuse it on principle? I think you are hypocrits, if you think this is not a lot of political claptrap. The government mismanaged the economy and they are continuing to do that. There are going to be a lot more bailouts in the future. Get used to that folks. Thank your lucky stars that there were some people in Washington (The Rebublicans) who knew what had to be done. But the blame on the jerks in the democratic Party who didn't have any idea at all what to do and effectively passed the losses on to mainstreet, that's you and me folks, when they could have avoided doing that. Bottom line is the democrats made the problem worse by turning the "bailouts" into a policitical gambit in which they stole the wealth from the American people and passed the blame onto the political scapecoats in WallStreet. Its all BS!!!
When the entire country is bankrupt due to the risk taking democrats spend and tax policies that abuse the gulibility of the american public, we will all be demanding a bailout and it might just be justice for us that no one steps up to help us out. After all we deserve it dont we???
You are right on Warbler. Just one thought how can China bailout the US; their available capitol is $803 Billion. Compare that to one American company like Goldman Sachs, their investment portfolio is $790 billion. The US government has already failed and is bankrupt, their only course of action is printing more money until everyone refuses to accept it anymore. We went bankrupt back when Nixon defaulted on the US currency by closing the gold exchange.
We bail them out and then they have the check to pay themselves bumper bonuses. If you ask me no one at the company should receive a bonus until all tax payer bailout money has been paid back with interest.
Bear Sterns went down and the Market bled dry. Too big to fail was a one time fix for an extraordinary situation. We now need something in place to make sure we never have to do that again.
Years ago during the S&L crisis a vice president of a large bank told a friend of mine, " The bank did not care what they did because of their effect on the economy the government would always bail them out." I guess he was right.
Companies should always be able to fail in a proper working free market system.
It would be great to see 'No such thing as too big too fail' implemented and the maybe then banks would participate in fixing the system instead of fighting against changes to protect themselves and us. Frankly I can think of lots of things I rather spend several billion on...
Oh, I thought you meant git rid of this congress and start over.
im not sure but i think i read somewhere that the to big to fail companys will still be able to get bailed out even with the reform bill
Did you say TOO BIG TO JAIL?
Wow... what a mistake we make when we don't allow companies stand up for themselves. OH, don't worry... we'll bail you all out... you too little Country!
The gov't should not be in the banking or auto business. It is unconstitutional. There is no more free-market capitalism. We are moving closer and closer to a Socialistic society thanks to our country's leader Mr. Barak Obama. He is a Marxist. In a free-market those companies would have been allowed to fail. AIG was bailed out because it insured all the worthless paper the Fed had bought, not because it was "too big to fail". In regards to this Wall St. reform bill that is making its way through the senate it is a big joke! The government is taking more and more of our liberties and freedoms away as each new bill passes. They could care less about the people, they just want to have more and more control over us. Regulation is not the answer. The government is using smoke and mirrors or propaganda to have tighter control and to take away more of our freedoms and liberties. Its really no different than what Hitler did with the use of propaganda. Obama has used this CEO pay ordeal as a means to get one of the biggest scams in history passed (health care bill). He has driven into the minds of Americans that big corporations have scammed them out of their money and are evil so they would vote for his Socialistic health care bill. He could give a rat's behind how much those CEO's make, he just wants to make it where the gov't and his party have absolute control over the American people. He folks, is the one that is evil. He needs to be stopped. Please do not buy into his propaganda. This financial reform bill may be the start to an end of daytrading and investing. The only thing we'll be investing in is the pockets of our gov't officials. "Too big to fail" is just propaganda to gain more and more control and to take more and more freedoms and liberties away from the American people.
GREAT! well said....
Hi Pipsniper:
Boy do I agree with you. Don't give up hope, as we have an election in Nov. and it's going to take people like you and me to rally and get those socialist's out of office . Hopefully a conservative right will again govern and repeal much of what this reprehensible left wing has done to our country.
H
Do your own research. Don't be a puppet and repeat others.
you are spouting propaganda! - Obama is mild by comparison
REALITY - corporations especially very large corporations are there to take citizens rights away to a free market - they are all looking and planning constantly for a monopoly - they buy congressmen and regulators to the point that people die and people lose their homes and jobs
it should be self evident that the oil spill is a product of the industry controlling the regulators and the laws that govern them - they deliberately avoided safety procedures and went with a defective blow out preventer for weeks knowingly before it blew up - BP murdered 10 people and killed the environment
the mining industry in WV mudered over 7 people because the ruless for methane were not enforced - cited violations were not cured - the industry owns the inspectors
the banks took a negatgive situation for mortgages where fair value would have come in only 25% absent synthetic CDO's and took it down 45-50% in value with synthetic CDO's wherein they created environment of phony ratings based upon paying off the rating agencies or stuffing the synthetic CDO's with garbage and then blowing up the market to an extent NO one would touch any CDO and the syndication market collpased and so did the ability of anyone to finance even 700-800 credit rating for consumers
REALITY is we have an organized crime - wave - from republican and democratic orgy of lobbyist money for their benefit
and now the inevitable change takes place
you need someday to stop drinking coolade -- Jim Jones killed hundreds of followers that way!!!!!!!!!!
I think the reform bill should separate hedge funds from traditional banking, requiring those banks to hold any loans they made and limiting their leverage to some reasonable multiple like 10 or so. Finally hold the directors of those banks personally accountable for the losses incurred by their banks. If this were done we might actually have reform and stability.
It might also be helpful if our esteemed legislators knew the difference between regulation and enforcement; we already have quite a lot of regulation, but last I knew, watching porn didn't equate to enforcement.
Bob S says some good things, however government watch dogs were so busy watching porn on taxpayer owned computers that they did not have time to do their job. It could been narrowed down to one company to regulate and still they were too busy to do their job. The problem is not the companies but our beloved inept government.
The SEC and Justice Dept have allowed excessive mergers and consolidations, especially in the financial and insurance markets. (Energy and defense companies are others.) It initially makes it easier for the bureaucrats to deal with fewer firms but begets entities "too big to fail" or thoroughly monitor. The oligarchies with such high concentration of wealth can generate huge profits. These mega-firms then wield too much influence, political and monetary, enabling them to generate "innovative" products with no fear of loss, much less punitive action. They are not only too big to fail but too influential to regulate. A complicating factor is that European countries have allowed similar or greater consolidation (EADS comes to mind), with subsidized operations, making competition on an international level left to these few mega-firms.
Excellent point, Sergio, as illustrated in Europe. Now with the bailout behind them, the banks are bigger still. And how has this affected smaller banks and small businesses? No money. Hence, money supply has continued to fall for more than two years. And, please note well, jobs remain stagnant at best while millions upon millions of citizens sit without jobs and spend their time in bankruptcy. This "Robin Hood" steals from the poor to give to the rich. And the government goes right along with the scam, even facilitating the entire affair.
Right on Nolan!
I still believe that had the ratings companys actually done their jobs none of this would have happened. All of the failures because of massive default would have been avoided, or at least expected.
The "rating companies" can't/won't do their job, they are paid by the companies that want good ratings so that they can peddle their "stuff". The same holds true for property appraisers in the real estate business. "watch dogs" have never been good at their jobs they like eating steak too much, this is normal and natural. You can not control greed. This is why all government controls are pretty much useless such as the SEC and Bernie. All government agencies are setup to protect the companies that they supposedly control and not the public. Let me know if you can find an exception! Buyer beware is the only viable solution.
Wall Street bankers need to fail just like any main street banker. Just because Wall Street bankers all fail does not mean the end of the U.S. economy. There are still businesses and there are still main street bankers left that are a big part of the U.S. economy. If all Wall Street bankers fail, all that would need to be done is to nationalize the Federal Reserve and keep it running under the U.S. Treasury until a better system to replace it or improve it can be devised.
To translate "too big to fail" means more than too big to fail. They should not be allowed to fall silently in the forest. We allowed this happen by not pushing our congressmen. They are the watchdogs, need to be reminded and brought to their knees while thwey explain why they allowed this to happen. But please, let us not let the government get so involved as to try taking the reins.
bookiebob:
I share your position . I would have qualified the question as to, Was it the right thing to do at the time? Like so many things in life, "timing is everything". We can now look back as Monday morning quarterback's and most likely agree that too big to fail is not in the best interest of the tax payer . However, the government and all of it's elected fools were in fact the cause . No one but the government had the capability to reverse the situation . Hopefully, all loans will be repaid and a net profit is in fact feasible . Won't that be a first?
H
Susan,
After I voted, I realized I probably did not understand the questions.
Does good riddance mean we want to get rid of the term or get rid of orangizations too big to fail? I think we should not allow companies to get so big that, no matter what they do, we cannot allow them to go bankrupt. When they play with too much risk, they should fail! The principals and investors should bear the brunt, not pass it on to taxpayers.
Hi Zollie,
Good riddance does indeed mean that you agree that its time to get rid of "too big to fail". I updated the answers to make them a little more clear.
Thanks for the comment!
Best,
Susan Jackson
Director of MarketClub Education
INO.com and MarketClub
It would be nice to see Barney and the "boys" hold themselves accountable for the loans they required of Fannie Mae and Freddie Mac which should be in any Fin-Reg Bill.
You are so right . Had all those so called Senate watch dogs done their jobs, this issue would be non- exsistant.
Harry
Senate watchdogs are no more than puppets for the PACs and other organizations who help them get elected, and don't know much of anything about real economics and the markets. Mostly they're experts in running successful elections. I can't think of any who are any more qualified to say Things Are Great any more than they're qualified to say Things are Bad.