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Would We Have Been Better Off If The Gov't Let The Banks Bottom Out, Not Bailing Em Out?
Posted on 5/15/17 at 8:58 pm
Posted on 5/15/17 at 8:58 pm
Watching "Madoff" on CNBC, they're going into the 07 recession. Keep in mind that I was around 13 at this time, so I didn't know a thing about it relatively speaking. Seems to me that a lot of tax paying dollars went into bailing out the banks, auto companies, housing market, etc. would the American people have been better off to let them hit bottom and then work back up?
I'm not too schooled on what happened during this other than constantly hearing my dad talk shite about Fannie and Freddie and getting pissed about Barney Frank.
I'm not too schooled on what happened during this other than constantly hearing my dad talk shite about Fannie and Freddie and getting pissed about Barney Frank.
This post was edited on 5/15/17 at 9:04 pm
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Posted on 5/15/17 at 9:00 pm to TigerFanInSouthland
Don't forget the auto industry.
Should we get ready to bail out jc penney, sears, circuit city? Hell no!
Should we get ready to bail out jc penney, sears, circuit city? Hell no!
Posted on 5/15/17 at 9:01 pm to TigerFanInSouthland
Long term, we probably would have been better off, but it would have been painful as frick in the short term. More so than it already was.
Posted on 5/15/17 at 9:05 pm to TigerFanInSouthland
I think the rational was to prevent another great depression.
Posted on 5/15/17 at 9:08 pm to TigerFanInSouthland
Probably would have ended up with another depression imo. So I think a bailout was the right move, though it could and should have been structured better.
Posted on 5/15/17 at 9:12 pm to TigerFanInSouthland
No. The banks all repaid the loans they received plus paid interest.
Enough banks failed to maintain market discipline, including Lehman Brothers, yet a catastrophic long-term meltdown of the world's financial markets was avoided.
A large part of the bad home loans were at the behest of the federal government which is probably why your dad wisely got pissed at Barney Frank.
Enough banks failed to maintain market discipline, including Lehman Brothers, yet a catastrophic long-term meltdown of the world's financial markets was avoided.
A large part of the bad home loans were at the behest of the federal government which is probably why your dad wisely got pissed at Barney Frank.
Posted on 5/15/17 at 9:13 pm to TigerFanInSouthland
quote:
they're going into the 07 recession. Keep in mind that I was around 13 at this time
So that makes you like twenty five now? Your too young to have an opinion that matters, sport.
Posted on 5/15/17 at 9:13 pm to TigerFanInSouthland
Iceland let the banks fail, prosecuted the bankers, and bailed out the depositors. Their unemployment rate peaked at 6.3%.
Posted on 5/15/17 at 9:42 pm to TigerFanInSouthland
Would have been worse than the depression. frick that. I graduated college around that time, and the economy has been a shite show. I would have lost my shite had it been worse.
Posted on 5/15/17 at 10:41 pm to TigerFanInSouthland
Yes. that's how the system is supposed to work. Instead of letting the investors in the banks who didn't pay close enough attention to what they were investing in feel the pain, we stole money from future tax payers to make the problem go away. Pain is often necessary for us to learn lessons like maybe you can't trust ratings that are paid for by the companies being rated.
Basically if our government didn't have their hand in the cookie jar too there would have probably been criminal charges brought. But part of why it was so big is that so many people were busy looking the other way.
quote:
I'm not too schooled on what happened during this other than constantly hearing my dad talk shite about Fannie and Freddie and getting pissed about Barney Frank.
Basically if our government didn't have their hand in the cookie jar too there would have probably been criminal charges brought. But part of why it was so big is that so many people were busy looking the other way.
Posted on 5/15/17 at 11:11 pm to TigerFanInSouthland
We would be the same. Until Jesus returns, the wealthy will always be greedy and always manipulate us and the system out of money. If you stop them one way, they will figure out another way.
Posted on 5/15/17 at 11:14 pm to TigerFanInSouthland
As usual, LSURussian is right about the bailout money. The vast majority was paid back with interest.
The problem I have, is that we essentially did two things.
1) We set the "too big to fail" precedent. We showed that we will socialize losses (in the short term at least) but privitize gains. In line with that, we showed that companies can, for the most part, do whatever they want, and if they are a big enough part of the economy, we will bail them out.
We have created a significant moral hazard, and we didn't actually fix anything. We still have bubbles.
2) We allowed the govt to pick winners and losers. We propped up Citibank, but allowed Lehman to fail. I will never understand that.
If the govt had not gotten involved, it would have been very, very, very bad. But the bubbles would all be popped, and after 5 years of awfulness, we would have been much better off. Housing prices would now be much more in line with personal income. Lending practices would be sane. We would probably not have this college loan bubble.
The problem I have, is that we essentially did two things.
1) We set the "too big to fail" precedent. We showed that we will socialize losses (in the short term at least) but privitize gains. In line with that, we showed that companies can, for the most part, do whatever they want, and if they are a big enough part of the economy, we will bail them out.
We have created a significant moral hazard, and we didn't actually fix anything. We still have bubbles.
2) We allowed the govt to pick winners and losers. We propped up Citibank, but allowed Lehman to fail. I will never understand that.
If the govt had not gotten involved, it would have been very, very, very bad. But the bubbles would all be popped, and after 5 years of awfulness, we would have been much better off. Housing prices would now be much more in line with personal income. Lending practices would be sane. We would probably not have this college loan bubble.
Posted on 5/15/17 at 11:19 pm to TigerFanInSouthland
Dont you even Ludwig Von Mises and Milton Friedman bro?
Posted on 5/15/17 at 11:57 pm to TigerFanInSouthland
My biggest thing with all this is, isn't our economy supposed to be founded on free market capitalism? So some businesses fail and some thrive. I know that there is some truth and some falseness in that statement, most likely, but what the government did seems to me to have gone pure socialist on the problem.
Posted on 5/16/17 at 12:40 am to TigerFanInSouthland
Absolutely. The trough would have been deeper, but the rebound faster and more sustainable. By bailing them out, we never solved what caused the bubble, the market never truly corrected, and we've been stuck in economic limbo ever since.
Posted on 5/16/17 at 4:43 am to TigerFanInSouthland
Our financial system is the grease that greases the skids of the economy. It is the life blood. The economy is built on business and business built on confidence. Confidence in the financial system was in jeopardy. I won't Monday morning quarterback the decisions made when all hell was breaking loose. Things could have been much worse.
Posted on 5/16/17 at 5:00 am to TigerFanInSouthland
We would be better off in almost every single instance had the government not stepped in to mess with free commerce.
Posted on 5/16/17 at 6:10 am to TigerFanInSouthland
quote:A cocksucker in every sense of the word.
Barney Frank
Posted on 5/16/17 at 6:34 am to TigerFanInSouthland
The most amazing thing to me is that Henry Paulson made ~$7 billion in 2007 and ~$9 billion in 2009 off of this mess.
I'd think that would cause riots. Nope, nobody GAF.
I'd think that would cause riots. Nope, nobody GAF.
Posted on 5/16/17 at 7:38 am to TigerFanInSouthland
Yes. Both the banks and auto industry.
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