TIMOTHY EGAN: How Obama Saved Capitalism and Lost the Midterms

[CARLHAYDEN]

Exactly.  I do remember A&P, and they didn't make everybody else's individual and business transactions possible.

Hmm.

Being the world's largest grocer (circa 1950) isn't important, but a big bank is diferent.

Now, this may come as a shock to you, but, not so long ago federal law prohibited interstate banking, and hence, the megabanks (in the current context) didn't exist.  We survived just fine without megabanks.  From what you would have us believe, "individuazl and business transactions" would not be possible.  Which simply isn't the case.

Why do you hate allowing the consumers to make decisions and instead prefer to have the feds pick winners and losers?

You seem to believe that the banking industry is some sacred cow.

Believe it or not, in some countries the banks are part of the government.

More significantly, there are a large number of banks in places like lSwitzerland, Leichtenstein, and certain carribean islands, that exist just fine without the prospect of government subsidies.

[patrick1]

You do realize that the government backs these banks depositors by FDIC and we would be on the hook for a lot more money that we spent if we had massive bank failures?

If the banking industry failed, yes it would have been very very bad Carl.  I think it would be better to have these institutions functioning and giving loans rather than going to Joey No Nose down the block for a micro-loan.  The issue was that if there were cascading failures (due to previous disgraceful risk management and borderline illegal activity) then there was a chance that there would not be a market place left to decide the winners and losers.

[CARLHAYDEN]

You do realize that the government backs these banks depositors by FDIC and we would be on the hook for a lot more money that we spent if we had massive bank failures?

If the banking industry failed, yes it would have been very very bad Carl.  I think it would be better to have these institutions functioning and giving loans rather than going to Joey No Nose down the block for a micro-loan.  The issue was that if there were cascading failures (due to previous disgraceful risk management and borderline illegal activity) then there was a chance that there would not be a market place left to decide the winners and losers.

Yup.

Keep repeating the allegation that the world will end unless we make sure that the big banks are not allowed to fail.

Truth is, you just want to make sure that there is NO accountability for 'disgraceful risk management and illegal activity (not all borderline)' if the organization is both big and in the financial industry.

Basically, you have set up a situation not so very different from primitive socities of a few centuries ago where the 'nobility' diddn't have to bear responsibility for their actions.

Apparently big banks constitute the new nobility in your world.


Now, I have given numerous examples of where the world has functioned just fine without bailing out big banks, you merely repeat the canard that the world would end if we don't bail them out.

[patrick1]

You do realize that the government backs these banks depositors by FDIC and we would be on the hook for a lot more money that we spent if we had massive bank failures?

If the banking industry failed, yes it would have been very very bad Carl.  I think it would be better to have these institutions functioning and giving loans rather than going to Joey No Nose down the block for a micro-loan.  The issue was that if there were cascading failures (due to previous disgraceful risk management and borderline illegal activity) then there was a chance that there would not be a market place left to decide the winners and losers.

Yup.

Keep repeating the allegation that the world will end unless we make sure that the big banks are not allowed to fail.

Truth is, you just want to make sure that there is NO accountability for 'disgraceful risk management and illegal activity (not all borderline)' if the organization is both big and in the financial industry.

Basically, you have set up a situation not so very different from primitive socities of a few centuries ago where the 'nobility' diddn't have to bear responsibility for their actions.

Apparently big banks constitute the new nobility in your world.


Now, I have given numerous examples of where the world has functioned just fine without bailing out big banks, you merely repeat the canard that the world would end if we don't bail them out.

Carl, 300 banks have been allowed to failures in the last three years.  The US government provided liquidity to the industry to forestall a general collapse. Most of TARP has been paid back and portions of the program made money. If we don't do something that reforms the system then I believe you have a point and we did create a moral hazard.  I agree that there should have been and needs to be more accountability. The system has to be reformed but the bank bailout was necessary and not that costly in the end. 

[CARLHAYDEN]

You do realize that the government backs these banks depositors by FDIC and we would be on the hook for a lot more money that we spent if we had massive bank failures?

If the banking industry failed, yes it would have been very very bad Carl.  I think it would be better to have these institutions functioning and giving loans rather than going to Joey No Nose down the block for a micro-loan.  The issue was that if there were cascading failures (due to previous disgraceful risk management and borderline illegal activity) then there was a chance that there would not be a market place left to decide the winners and losers.

Yup.

Keep repeating the allegation that the world will end unless we make sure that the big banks are not allowed to fail.

Truth is, you just want to make sure that there is NO accountability for 'disgraceful risk management and illegal activity (not all borderline)' if the organization is both big and in the financial industry.

Basically, you have set up a situation not so very different from primitive so cities of a few centuries ago where the 'nobility' didn't have to bear responsibility for their actions.

Apparently big banks constitute the new nobility in your world.


Now, I have given numerous examples of where the world has functioned just fine without bailing out big banks, you merely repeat the canard that the world would end if we don't bail them out.

Carl, 300 banks have been allowed to failures in the last three years.  The US government provided liquidity to the industry to forestall a general collapse. Most of TARP has been paid back and portions of the program made money. If we don't do something that reforms the system then I believe you have a point and we did create a moral hazard.  I agree that there should have been and needs to be more accountability. The system has to be reformed but the bank bailout was necessary and not that costly in the end. 

First, were the banks that were allowed to fail treated the same way as B of A and Citi?

We both know the answer to that.

Second, while you make like to reward big banks, and punish small banks (i.e. have the government pick winners and losers), I do NOT!

Third, the only reason that the TARP money has temporarily been paid back was so that the banks could provide even more outlandish bonuses for their executives  The banks receiving the bulk of the TARP funds haven't turned healthy, but rather have engaged in some creative accounting.  This creative accounting can go on only so long, which in part explains why the banks have gone into high gear on housing repossessions, including fabricating legal documents and filing perjorious affidavits.

In conclusion, the balilout of the big banks was NOT necessary, and we have yet to see the full costs.

[Torie]

Carl, what happens to a free market economy when the banks fail?

Torie, actually, it sounds to me like the people you're b-slapping are public employees.

Jesus Christ, political rhetoric in this country is depressing.

I was b slapping Obama for being an enabler for public employees via the stimulus bill, who desperately need to go on a fiscal diet, and have their pension system totally revamped, the overtime and over manning games end (particularly with fire fighters), and on and on.  

Between the tag team of anvikshiki and CARL here, I feel like I am the ham in the middle of a ham sandwich, which someone really ravenous with  sharp teeth is about to bite down on really hard.

What was I lying about again?  I am losing track here, in a senior moment. 

I find the notion that I favor subsidizing failing industries to be quite amusing. Who knew? 

[Mercenary]

So Obama saved corporatism?
Is that supposed to be a good thing?

[Swing low, sweet chariot. Comin' for to carry me home.]

The banking system was resuscitated by $700 billion in bailouts started by Bush (a fact unknown by a majority of Americans), and finished by Obama, with help from the Federal Reserve. It worked.

agreed, but why then claim "Obama Saved Capitalism" when all Obama did was continue a policy already put in place?

[opebo]

agreed, but why then claim "Obama Saved Capitalism" when all Obama did was continue a policy already put in place?

However the larger point is that only government intervention can save capitalism, and since one party goes around crying out against government intervention in the most asinine way, we can say it is the Republican Party which is anti-capitalist.