strangecircus said:
Well, you need to think does everyone actually pay to clean it all up? Did the deficit or taxes go up, or is it just the Federal Reserve printing huge sums of cash to beef up banks? There is a difference.
There is. It's the difference between Bear & AIG getting a bailout & going out of business. It's the difference between the execs getting golden parachutes & paying for the mess out of their own pockets &, yes, getting jail time.
strangecircus said:
Another difference is motive or intent. If by doing it, they were idiots and made bad investments, well then do you really think it deserves jail time? Investment is risk and the market is a risk if it doesn't work out it doesn't mean you deserve jail time for it. The whole foundation of our justice system is motive.
I don't disagree. Yet they were gaming the system. That needs some kind of punishment, if not jail. Trading bans, loss of bonuses (at a f*cking minimum), loss of personal property, something. The robosigners & ninja-loaners deserve jail.
strangecircus said:
In the end, FDIC guarantees bank deposits, and banks can spend depositor's money on investment and loans. That is the root issue. So people will always be expected to "pay to clean it up" if a bank explodes.
I take no issue with that: the depositers (or homeowners) shouldn't be paying the price. Neither, however, should the execs who
created the mess be enriched by that process.
strangecircus said:
Lehman Brothers or AIG or other investment companies I agree should suffer the consequences.
We're agreed.
strangecircus said:
when trillions of dollars are leaving the system and you have to literally decide overnight whether to stabilize the free world, you don't have the luxury of acting slow or separating the good from the bad you have to blanket treat. The Fed could see trillions being sucked out of the economy in real time because of the panic.
And I don't suggest nothing should have been done. I do say the worst cases should've been simply wound up & closed, in an orderly (if accelerated or expedited) fashion. I also say the execs should have been held to account.
Nobody was even
charged by DoJ.
It took NY State to do that. (I wish I could recall the D.A. who did it; he deserves a medal, & Holder's job. Holder deserves a desk doing Immigration law in Guam.
)
strangecircus said:
even solvent companies unable to secure loans to make payroll.
And how much of that was because solvent banks refused to loan money for reasons having nothing to do with the crisis
per se? IDK what the law says, & I'm not sure about the psychology, but I do know banks were sitting on billions & refusing to loan it.
strangecircus said:
If you want the punishment for white collar crime to be bigger then that's a separate issue than "too big to fail" or being idiots with other people's money. The punishment didn't fit the crime, then make the laws more harsh, make more regulation and enforce existing laws. But the punishment will never fit the crime for a "trigger" like Lehman Brothers that cascades to the entire economy. You can't legislate away fear or bank runs or in this case the whole economy running.
I don't mean to suggest that's possible. I only mean to say what was done bears little relationship to the seriousness of the crisis created. Nobody responsible for creating the mess was actually held to account; instead, they were
rewarded.
The bailout had
no strings at all, not even a (flimsy) promise not to misbehave again.
And the law that supposedly "fixed" the problem does nothing like it.
strangecircus said:
Yes that is social engineering, to help with class mobility and first-time home buyers. But, even if that didn't exist, people would still want to buy a home. You can't get rid of that, and where there's a want the market will respond.
I don't dispute that, & I wouldn't try to prevent it. What I'm saying is, try & channel the desire in a different direction. Do you believe that's impossible?
Go back a moment to the G.I. Bill. Had there been a "divided" option for homeownership (is that a word?
), one for new homes, one (with better terms) for "used" homes (I can't think what the term is
), would it have changed the number of owners? Or would it only have changed the number of new homes built? My sense is, it would only have changed the number of new homes. Indeed, it might actually have increased the number of new owners. The same is true of the existing subsidy. It's a laudable goal; it's
effects are poisonous. That's a policy issue, or an issue of structure; change how it's done, I have no objection to it.
strangecircus said:
when due diligence is not done, then the mortgage defaults.
There's a huge difference between "lack of due diligence" &
prima facie fraud.
strangecircus said:
hope we keep our jobs so the mortgage payment can be made every month and escape the trap of rent
And if that's all it was, I wouldn't be complaining (I don't think). It's bigger than that. It's a gov't program that is supposed to help people who can't afford it. It's paying off people who
can, & giving them an incentive to "go big", which is attracting people who can't afford it to "go big", too--& the result is ninja loans...
strangecircus said:
You mentioned this in the other thread but 1. Not all TARP funds were spent, around 500 billion and 2. TARP was repaid and made the government money.
Which does not make giving the deadbeats & crooks the money to begin with a good idea. See above.
strangecircus said:
eliminate waste and useless employees. The 2008 recession was the perfect excuse for companies to lay off workers and hoard cash.
Yeah, that's right, workers don't actually produce anything for the company. What is it with U.S. companies? The first, the only, response to cutting cost is to fire somebody. Here's an idea: let's see what happens to Lehman's or GM's stock price if they lay off
everybody. I'm sure the price will skyrocket--right before it tanks.
Here's another idea: let's try cutting executive pay instead of firing people, & hire execs that actually like the job & the company, & not just the size of their bonus checks. Or pay execs for actually making money, & not giving deadbeats bribes to go away (like Coke did).
We're now, unfortunately, getting OT....
strangecircus said:
This is a market correction that happens every 30-50 years. It will happen again
It will happen again because the system is rigged. I said it before: there's a difference between "correction" & "crash". As it is now, the system is set up for "crash". It need not be. I'm genuinely wondering how it's possible.
It appears you think it's not. It seems you think periodic crashes are actually a good thing.
I don't. IMO, this kind of economic chaos is bad for everybody. How is volatility & uncertainty & economic slump a good thing? How is that better than a slower, but steady, growth?
No, I'm not saying "much slower", just take a tick off the top. Or make it up some other way. How about companies increasing profitability by improved productivity rather than simply cutting jobs, for a start? Or reducing energy waste in the economy?
Unfortunately, that probably wants its own thread...