Why not nationalize the banks?
Commy
Posts: 4,984
the shareholders failed at running things. bank ceo's are taking million dollar bonuses during record losses...how could it possible get any worse? a government run operation could only do better.
If tax payers are holding them accountable at least they might be thinking twice before ruining our economy.
If tax payers are holding them accountable at least they might be thinking twice before ruining our economy.
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Nationalize the banks? It's the only option at this point. Unless you want a "blood in the streets" scenario, which only a free market nut case would want.
Banks fail, companies cant pay payroll, more people laid off, more foreclosures, more neighborhoods harmed in the process, businesses close because of this, and the cycle continues. It's simple.
If a bank is "nationalized" the people running it are running it no longer in control, the government is. I trust Obama a lot more than these banking fucks.
Speaking as a free market nutcase, I believe this whole situation would have been averted if we actually operated on a free market system-- One major reason that we are in the mess that we are in is because of the government forcing banks to loan to people who couldn't afford to buy the houses in the first place. Now, here's the kicker-- did the banks lobby to write this legislation? Could be. If things kept booming the way they were, and people had to foreclose, the banks would have been able to re-sell the foreclosure to other buyers who had the money to buy or not. As long as the bubble stood to last, the banks would make a killing with such a law in place as the Community Reinvestment Act, where technically they were forced to keep making loans no matter how good or how bad. As long as they didn't run out of people to lend to, they really couldn't lose. Eventually, they might have even come across people who actually could afford to buy some of these houses and who could actually make timely payments on them.
Free markets do not allow laws to be written that benefit any particular business. Regulation always seems like a good idea, until you find out who has actually written the regulations. Often times, all it does is just stifle competition. Once upon a time, you didn't need insurance of any kind in this country BY LAW. Who do you think actually wrote the laws that required us to have insurance on just about everything we own, and to protect everything we do? Insurance companies. Now I'm not completely hating on the idea of insurance, or even the fact that it is law, maybe it needed to be-- but you can easily see how such a concept has created a country full of ambulance-chasing lawyers, inflated medical costs, etc...
The only regulation that should be written, is regulation which takes away a bank's power to create money out of thin air-- fractional reserve banking must end. You are 100% right in saying that the banks are not to be trusted-- so why give them the power to create money by loaning out more than they have in reserve? Such a policy doesn't allow them to use any discretion in their lending at all, with or without laws telling them to whom they have to lend.
Right now, businesses have to be "weened" off of credit. I'd rather see a bunch of the taxes that businesses pay eliminated for a while, while they learn to stop using credit to meet payroll. If Obama has to re-issue the Greenback as another currency to make this happen, I'd rather see that then us keep putting ourselves in debt to China and the Federal Reserve to solve the problem.
Anyway, diving head-first into a true free market would be painful right now-- like a heroin addict quitting cold turkey. I think we need some methadone here, that starts putting us towards a REAL free market system, where all the government does is enforce contracts rather than spreading the wealth around. Let's get rid of the Federal Reserve, and if we're going to have a fiat currency for the time being or forever, let's print it ourselves, free of interest and debt.
How does eliminating business taxes wean businesses off using credit? You think they're going to do anything different? Whatever you give in tax breaks will be added to executive and shareholder bonuses and they'll still be using credit to meet payroll.
Generally I agree though. Our entire economy right now is based upon credit and debt. It's unsustainable. I just don't think corporate taxes are going to solve that problem. The problem is that greed rules... banks and business can make huge money on risky ventures like that. It's slash and burn economics though. Long term profitability and security is traded for short term gains. People know they can retire if they just get a profit spike for one year that drives up shareholder payouts, then if the company tanks, who cares? They're already set. There's no incentive in this economy to build a stable company. The only incentive is to score big now and get out before the bubble bursts.
Exactly.
I hear what you are saying. To me, this is not the product of a TRUE free market system-- not one where we use constitutional sound money, anyway. Bottomline banks should not be able to do what they've been doing, PERIOD, whether it's leveraging junk derivatives, or being able to loan out 10 times the amount of money that they have on hand. Imagine that for a second. How would banks make their money? If they were forced to operate on full reserves they would have to be incredibly prudent with their loans-- Maybe even charge fees to hold people's money? Maybe it wouldn't even make sense for us to operate through banks at all? In that scenario, would they not be biting, scratching, and clawing at each other, just to work for us?
I am for any legislation that returns banks to operating by the same rules of money and credit that people are held to... If that's what you are saying, I'd say we are in agreement.
I think the laws that would be written to achieve this would end up revising the entire banking code above all else.
I can't see how it is any easier, or at all feasible for the government to oversee how many thousands of businesses in this country that are in the same boat.
Certainly, you must be referring to only these huge banks? What about big tax cuts for small business? Would you be ok with that?
Do you disagree that banks were forced to make bad loans, and thus take on bad derivatives to make it all happen as part of the CRA?
No one forced the banks to givwe out bad loans... the Government didn't force the banks into givig loans to people knowing full well that they were not able to pay thme back.
The banks got into this mess due to one thing... GREED.
Hail, Hail!!!
I am referring generally to our corporate law. Just as you suggested we should probably overhaul our banking code, I think the corporate law needs to be overhauled as well. I'm not saying the government should take over every business in the country and run it personally. But we need a realistic and comprehensive scheme of laws to carefully regulate bad behavior. Like you said, banks should not be able to loan money they don't have. I agree. I also think businesses that can't make payroll or pay off any debts incurred during the year should not be able to give bonuses or shareholder payouts. Those are luxuries and rewards for businesses that successfully made money, not a God-given right that precedes all other obligations.
That's part of the problem, but it's nowhere near the whole problem or even the biggest problem. The banks loved this as much as anyone else... they were "forced" in the sense that they couldn't discriminate, but they didn't have to hand out bad loans as easily as they did. They did so very willingly and eagerly for the very reasons you stated... they thought that if people defaulted it would only mean they got to make more money... win-win! I've no sympathy for the fact that they found out it was a pipe dream.
Cosmo, whether the government forced banks to do this or not-- doesn't matter. I agree with you. Read my earliest post where I state how banks may have found laws like the CRA favorable to themselves, and may have co-authored them.
Of course I agree that greed is the major player here.
I don't see how any oversight of the CURRENT SYSTEM is ever going to do any good. We need to reform the banking system. Period.
The oversight needs to be placed on the TAXPAYER Dollars that will be directed towards the banks. Those are NOT dollars the banks have earned... they are dollars being given to them BY THE GOVERNMENT. To say the government should not hold the banks accountable for our dollars is insanity.
Hail, Hail!!!
Wall Street was demanding more loan packaged products. They didn't take on "bad derivatives" they created them! to met the demand on Wall Street. We all know about the sub prime mortgages. They were packaged up and sliced and diced and sold. The market was booming at the time. Banks and hedge fund managers were speculating that the markets would continue to rise. For simplicity say a bank had a fund worth 500,000. Instead of putting that on their books they put down 50 TIMES that! Thinking markets will continue to rise, houses have to continue to go up at 20% a year right? WRONG! Fucking idiots! Problem now is that these fucks were playing around in other markets with their made up assets. Now compound this simple scenario thousands of times all over the world. Guess how we got here? FREE FUCKING MARKETS no oversight and no regulation. :roll:
Guess how that is done? Regulation and oversight man! Come on!
I'll do you one better. Everyone of them (CEOs and any of the other architects of this schemes, including any politicians involved) BOOM-- in the slammer ASAP. I think confidence would return at an all time level if we actually showed the country that accountability is on the comeback.
But seriously, this needs to happen-- a class action lawsuit against the people responsible in these banks. You're a lawyer in a matter of months... Spearhead the effort!
We keep coddling these people that continually rip us off. I believe there are enough laws in place to try each and every one of them as it stands. Continuing to give them taxpayer money, while shaking your pointer finger saying, "Oh, we'll regulate you! We'll watch you like a hawk! We know you need this, but you better not spend it on yourselves, now!" isn't cutting it.
I hear ya man, I said it already. I said my regulations would consist mostly of repealing existing legislation-- namely, the bank code. I do not think we need to create any new government agencies or bureacracy to do it though. When these banks are guilty of predatory lending and real usury, take them to court.
The last thing I want to see is another stupid government agency out there to "protect us" that just wastes our tax dollars and does nothing.
Obviously, whatever code that allows a bank to create bad derivatives, is what I'm in favor of changing. Basically, all you and I are doing is arguing over what our definition of a Free Market is.
What are your thoughts on the Federal Reserve System? Would you be in favor of nationalizing them? Getting rid of them? Just curious...
I agree. And there was supposed to be oversight of the first bailout. How's that working out, anyway?
The problem is that the law is so patchwork and variable and confusing and contradictory that it is easy, and maybe even honest, for these people to say they had no idea they were doing something illegal. The biggest deterrent to foreign investment here is not our tax rates or anything like that... it is the general uncertainty businesses face with respect to knowing what the law is and will be. Like the businesses, our government only thinks short term. There's a big political blow up, quick, poorly designed reactionary legislation to appease voters, and it all adds up to an incomprehensible and unpredictable corporate code.
The people responsible for this mess generally followed the law. The problem is that the laws aren't very good or intelligent.
In addition, the money they make goes to bankroll high-powered lawfirms that can bury any attempts at accountability in years of motions. Class action is almost impossible and criminal charges are incredibly difficult.
Above all, these people have the upper hand. The laws on predatory lending and whatnot are written by legislators... legislators whose re-election depends upon campaign funding from credit companies and other special interests. The problem is huge. We need more than legislation... we need a paradigm shift in the way we think about our economic system. The banks, the reserve, the markets, etc. It all needs to change.
I think this is why people argued with you even though you both seem to want the same things. We can no longer tout the free market (as it has traditionally been understood) as the solution. Nor can we think regulatory agencies will fix things either. The market needs regulation, but it needs to be enforced by criminal penalties vigorously enforced, not wrist-slapping fines from regulatory agencies staffed by people working for the businesses they're supposed to monitor.
I couldn't agree more with this. I believe if you fix the banking system, the rest comes naturally. You restore them to an operation that works on hard numbers and hard money, and you will see that it is impossible for them to create the bubbles that they create now. It takes a whole different mindset as a country to see this. Will it take regulation? Of course. How else would you undo all of the bad laws that have only furthered the problem? Just maybe after things got in order, a few new laws may have to be written, but let's try for as little as possible. If you're going to write laws, make them good! Take your time! All this rushed bullshit is horrible-- the bailouts, stimulus, Patriot Act: all rushed, all bad.
Bad laws, as you put it, are completely taken advantage of. They're like these prescription drugs that are supposed to cure depression, but the main potential side effect is "thoughts of suicide."
Second, All we REALLY need to do is let the FREE MARKET WORK IT SELF OUT! KEEP GOVERMENT OUT!
Sure a lot of companies will go under but sometimes thats what has to happen in order for things to level out. Everyone became pigs and cleaned out the troff. Well, now some pigs have to be sold and eaten for things to be okay.
Free market Capitalism is the ONLY answer.
Sweep the Leg Johnny.
Funny how that movie was just cheesey when you were a kid and it came out... Now it's cheesey, but kind of scary with how true it is.
They live while we sleep!
The defining model of a completely free, un-restricted, un-regulated Free Market? L.A. Street Gang Drug Wars... or The Mafia.
In those scenarios, there are absolutely no laws or regulations in place and the way to eliminate the competition is to... well, eliminate the competition. Of course, that is the extreme end of Capitalism.
The point is... Capitalism NEEDs regulations, rules and laws because the greed of business is the same.. in a gang drug dealer, a small businessman looking to expand his fortune or the C.E.O. of Lehman Brothers.
Hail, Hail!!!
Why not just a Constitutional Federal Government, with the States defining what is actually criminal? Let banks play by the same rules as every other business, and we'll see what kind of ruthless edge anyone actually has over anyone else. When people are wronged, they seek out law enforcement and take it from there.
It's all been written, and is ready to go... We just refuse to acknowledge it.
You might want to check the details... in the original Bush Bank Bailout set up by Treasury secretary Paulson...
http://blogs.wsj.com/economics/2008/09/ ... -congress/
Specifically... read Section 8:
"Sec. 8. Review. "
"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."
...
Non-Reviewable and may not be reviewed by ANY Court or Administrative Agency!!!
More Bush Administration closed door business deals.
of course that shit didn't work... the banks KEPT the Taxpayer Dollars to shore up their bad assets and buy up ailing financial institutions to eliminate their competition. Non-Reviewable... immune to courts and government scrutiny... that is the definition of 'Get Government out of the Way and Let Business Decide'.
and that is what you get with Free (un-regulated) Markets.
...
Yet, another example that business cannot be trusted to operate without some sort of regulatory agency breathing down their fucking greedy necks.
Come on, kiddies... this wasn't ancient history... if was last fucking Fall, fer cripe's sake.
Hail, Hail!!!
Government giving banks, OR ANY OTHER BUSINESS TAXPAYER MONEY COULDN'T BE ANY FURTHER FROM BEING REPRESENTATIVE OF A FREE MARKET.
So yes, I agree with you that if you're going to get government involved, of course you have to make sure the money is being spent right. In a free market, bailout money wouldn't exist to begin with.
Also, if this is the original Bush bailout, how much did it change? I remember Congressmen telling us (lying to us actually) that they were going to watch how these banks spent this money.
Also, Bush is the worst, but let's not forget our current fearless leader also voted for this bullshit.