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Forums - General - All financial institutions to be run by the federal government.

ManusJustus on 16 June 2009

ironman said:
You sir, have no concept of how the free market works.

If a business is shady, people will stop purchasing their product. A business that is legit, will get more business. And that is why I am against government control.

You sir, have no idea of how economics work :)

In your argument that consumers will not purchase goods and services from shady businesses, you make the huge and incorrect assumption that information is transparent and easily attainable by consumers, and even then that the consumers can accurately analyze that information.  The only way that companies will be legitimate and transparent in their operations is through government regulation, and the only way that consumers can be properly informed of information (be it on levels of scale or complexity) is through government regulation.

Ironically, by simply using the word 'legit' to describe a business you infer that there already government control.



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famousringo on 16 June 2009
NJ5 said:
@TheRealMafoo: I'm just gonna assume you are correct as far as this reply goes:

Aren't these financial institutions now largely owned by the taxpayers? Once you get bailed out, you become someone else's bitch... If banks don't want to get strong-armed, next time they should take better care of their business instead of running it into the ground in the knowledge that they will become someone else's problem.

As I understand it, a lot of the (surviving) banks are paying back the bailout money quickly, precisely because they don't want to be subject to some of the strings attached to that money, such as limits on executive compensation. To many of them, I think the bailout money was just a lifeline they could grab to avoid being swept away while the bottom fell out of the market. Now that the money is there, and investors aren't panic-selling anymore, a lot of banks are free to make other adjustments to deal with their bad books.

These regulatory powers are something different. They apply to a bank whether it's taking bailout money or not. But I wouldn't look at them as a system for punishing banks for bad management, more as a system for preventing bad management which, while it may be extremely profitable in the short term, can lead to collapse in the long term.



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TheRealMafoo on 16 June 2009
NJ5 said:
@TheRealMafoo: I'm just gonna assume you are correct as far as this reply goes:

Aren't these financial institutions now largely owned by the taxpayers? Once you get bailed out, you become someone else's bitch... If banks don't want to get strong-armed, next time they should take better care of their business instead of running it into the ground in the knowledge that they will become someone else's problem.

Well, my personal opinion is bailing out any private company with public funds by just giving them money, is stealing. Those tax dollars were collected by the federal government to pay for running the county. They have no authority to arbitrarily give it away. Anyone who voted for it, should be brought up on charges if you ask me (and that would be just about everyone in Washington).

Also, you can not buy that which is not for sale, so giving a bank money you stole, does not give you the right to tell the bank what to do. The government should NEVER bailout any private company.

What they should do, is allow the company to file Chapter 11, and get fixed through the court system. The problem with that, is it's imposable for a politician to gain any political power if you did it that way.

Here is the problem with what's being proposed (and what Obama has already done).

Let's say person A is going to open a business, and they need 1.5 million dollars. They borrow 1 million from person B, and 500k from person C. Person A goes out of business (files Chapter 11). The courts then decide if it's worth saving this company, allowing for a restructure, or just selling off there assets and paying the people they owe.

In the case of AIG, they would have just restructured, and continued to operate as normal. But for Person A, they probably would just sell the assets. Let's say they did that, and it came to 750K.

What you do in that case, is give person B 500K, and person C 250K. They get the relative amount back that they loaned Person A.

The beauty of this system (and what demonstrates we are a country of laws, and not men), is it does not matter who person B or C is. Justice is blind. Person B loaned twice as much as person C, thus they get twice as much of the assets.

Obama does not like this. With Chrysler, he felt the United Auto Workers Union should get more then the big banks even though the big banks lost more. This is the way of Kings, where they just get to decide what they want, and it happens.

Blind justice is not something Obama wants. He wants sympathy for the groups he likes, and to slant the playing field there way.

Our form of government was put into place to keep this type of thing from happening, and with every law that passes these days, it's being slowing eroded away. If Obama get's his way, it will be completely gone in no time.

I will end this with a quote from a great man:

"There is danger from all men. The only maxim of a free government ought to be to trust no man living with power to endanger the public liberty." John Adams, Journal, 1772



De85 on 16 June 2009
ManusJustus said:

TheRealMafoo said:

I like to think of myself as someone who understands what's right and what's wrong.

I recognize that when you force people to work in the service of others, your enslaving them, and that's wrong.

First of all, almost everyone with a political opinion thinks they understand what is right or wrong, and they all think they are on the 'right' side.

Secondly, government regulation is not slavery.  If anything, a group of banks or credit cards that prey on people is more in tune with slavery than a government agency that's sole purpose is to protect consumers.

The amount of naivete in this post is baffling.   First off, banks and credit cards do not and can not prey on anyone without that person first royally screwing the pooch.  It's not the fault of the credit card company that you made more charges than you can afford to pay for, and must now pay the high interest rates that you knew you would have to pay if you didn't keep your balance current. 

Secondly, it would be great if the sole purpose of government agencies were to protect the consumers, but sadly that's not how it works out in real life.  One word: bureaucracy. 



akuma587 on 16 June 2009
ManusJustus said:

ironman said:
You sir, have no concept of how the free market works.

If a business is shady, people will stop purchasing their product. A business that is legit, will get more business. And that is why I am against government control.

You sir, have no idea of how economics work :)

In your argument that consumers will not purchase goods and services from shady businesses, you make the huge and incorrect assumption that information is transparent and easily attainable by consumers, and even then that the consumers can accurately analyze that information.  The only way that companies will be legitimate and transparent in their operations is through government regulation, and the only way that consumers can be properly informed of information (be it on levels of scale or complexity) is through government regulation.

Ironically, by simply using the word 'legit' to describe a business you infer that there already government control.



We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls.  The only thing that really worried me was the ether.  There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke

It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...."  Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson

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akuma587 on 16 June 2009
De85 said:
ManusJustus said:

TheRealMafoo said:

I like to think of myself as someone who understands what's right and what's wrong.

I recognize that when you force people to work in the service of others, your enslaving them, and that's wrong.

First of all, almost everyone with a political opinion thinks they understand what is right or wrong, and they all think they are on the 'right' side.

Secondly, government regulation is not slavery.  If anything, a group of banks or credit cards that prey on people is more in tune with slavery than a government agency that's sole purpose is to protect consumers.

The amount of naivete in this post is baffling.   First off, banks and credit cards do not and can not prey on anyone without that person first royally screwing the pooch.  It's not the fault of the credit card company that you made more charges than you can afford to pay for, and must now pay the high interest rates that you knew you would have to pay if you didn't keep your balance current. 

Secondly, it would be great if the sole purpose of government agencies were to protect the consumers, but sadly that's not how it works out in real life.  One word: bureaucracy. 

Really?  Under no circumstances can banks and credit card companies abuse terms in contracts that the average person would not understand without the help of a lawyer or abuse favorable legislation that the consumer doesn't even know about?  And it is certainly entirely fair that every contract you sign with these companies are almost always non-negotiable contracts that the company itself has written.  And they also can't impose arbitrary things on you like arbitration in foreign countries.  These companies are definitely never defendants in large class action suits either for wholesale abusing there power.  Your assessment is about as naive as it gets, and you obviously know very little about contract law.

And I like how your second point isn't even an argument.  You just throw out a word and assume you will convince people of something.



We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls.  The only thing that really worried me was the ether.  There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke

It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...."  Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson

NJ5 on 16 June 2009
famousringo said:
NJ5 said:
@TheRealMafoo: I'm just gonna assume you are correct as far as this reply goes:

Aren't these financial institutions now largely owned by the taxpayers? Once you get bailed out, you become someone else's bitch... If banks don't want to get strong-armed, next time they should take better care of their business instead of running it into the ground in the knowledge that they will become someone else's problem.

As I understand it, a lot of the (surviving) banks are paying back the bailout money quickly, precisely because they don't want to be subject to some of the strings attached to that money, such as limits on executive compensation. To many of them, I think the bailout money was just a lifeline they could grab to avoid being swept away while the bottom fell out of the market. Now that the money is there, and investors aren't panic-selling anymore, a lot of banks are free to make other adjustments to deal with their bad books.

These regulatory powers are something different. They apply to a bank whether it's taking bailout money or not. But I wouldn't look at them as a system for punishing banks for bad management, more as a system for preventing bad management which, while it may be extremely profitable in the short term, can lead to collapse in the long term.

That's what I meant. If banks are big enough to cause lots of trouble in the economy, and very badly managed, they're just asking to lose control of their operations (or go out of business in a messy way, which most governments wouldn't allow).

 



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ManusJustus on 16 June 2009
De85 said:

The amount of naivete in this post is baffling.   First off, banks and credit cards do not and can not prey on anyone without that person first royally screwing the pooch.  It's not the fault of the credit card company that you made more charges than you can afford to pay for, and must now pay the high interest rates that you knew you would have to pay if you didn't keep your balance current. 

Secondly, it would be great if the sole purpose of government agencies were to protect the consumers, but sadly that's not how it works out in real life.  One word: bureaucracy. 

Akuma summed things up nicely.  To put it simply, many low-skilled workers cant effectively read through a 20 page contract and completely understand all the legal and financial jargon.  Even if they realize that they are being wronged, lawyers arent a cheap and quick alternative.



Avinash_Tyagi on 16 June 2009
Kasz216 said:
Avinash_Tyagi said:
ironman said:
You sir, have no concept of how the free market works. If a business is shady, people will stop purchasing their product. A business that is legit, will get more business. And that is why I am against government control. They just mess up the way the free market works and clogs up the system. Tell me when the government has ever done something efficiently and correctly? I can site a few examples to the opposite. The DMV, Wellfare, Mass transit, Taxes, just to name a few. The kind of regulation the government is doing with the banks is actually going to do more harm than good. See, they are now forcing banks to make MORE bad loans (to fill a quota) in exchange for tax money. I say let the damn banks fail, let us go through a few months to a year of really tough stuff, and lets learn from the mistake. Of course, with Government at the reigns, history is destined to repeat itself.

First off in europe there are many examples where government involvement has been a success, resulting in situations which the free market could not bring about, just shows that well designes government systems can work well.

Also you're a fool if you think that the free market will result in beneficial outcomes on its own, first off there is the fact that information is not always shared equally, and then their is the propensity for the market to become irrational, this current crisis is a good example of the irrationality of the market and of information not being equal.

Also during the Depression many of the banks were allowed to fail, guess what we had a decade of economic collapse, you really have no idea do you, allowing the banks to fail would be the dumbest move ever, without a functioning financial market money would not flow through the economy, people would hoarde their cash and unemployment would skyrocket.

Except Europeon countries also see less economic growth and higher rates of unemployment.

Less government intervention largely coincides with larger government growth and lower unemployment.

Denmark aside due to flexicity which actually has a lot less government controls in a lot of areas in europe and even the rest of europe can't copy.

So it really depends on what you want your economy to do... much better with slight chances of systematic failure... (though the US economy is still better then most europeon economies GDP wise) or safer with slower growth.

The saftey of the section option usually seems mitigated by the growth of the first option though... such growth more then making up for what would be lost.

Yes, but in europe, the social safety net protects people who are unemployed better, and while they may have less economic growth than in the US, its hardly a big problem, since some nations in eruope have higer GDP per capita than the US, much higher in some cases, like look at Norway, while others are around the US, like Ireland, and Switzerland, doesn't sound like they are suffering over there, In fact if you use the Human Development index measure, US trails much of Europe, Canada and Japan, also you assume that the higher growth would make up for what is lost, if the economy went into total metldown like it would have without the massive government bailouts and interventions, then what would have been lost would have vastly outstripped any gains



 

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HappySqurriel on 16 June 2009
ManusJustus said:
De85 said:

The amount of naivete in this post is baffling.   First off, banks and credit cards do not and can not prey on anyone without that person first royally screwing the pooch.  It's not the fault of the credit card company that you made more charges than you can afford to pay for, and must now pay the high interest rates that you knew you would have to pay if you didn't keep your balance current. 

Secondly, it would be great if the sole purpose of government agencies were to protect the consumers, but sadly that's not how it works out in real life.  One word: bureaucracy. 

Akuma summed things up nicely.  To put it simply, many low-skilled workers cant effectively read through a 20 page contract and completely understand all the legal and financial jargon.  Even if they realize that they are being wronged, lawyers arent a cheap and quick alternative.

"Can't read through" or "Don't read through"?

If they don't have the ability to read the contract wouldn't it make sense to provide better education, training and or services to help people understand the contract? If they are simply too lazy to do the work to protect themself and read a contract why is it anyone's problem but their own?