Fringe Posted February 25, 2009 Share Posted February 25, 2009 OK, then where do capitalists get capital?The Feds just print out more money.link Link to comment Share on other sites More sharing options...
memebag Posted February 25, 2009 Share Posted February 25, 2009 The Feds just print out more money.linkIf debt isn't capital, fiat currency doesn't get to be capital either. Link to comment Share on other sites More sharing options...
TheNiche Posted February 25, 2009 Share Posted February 25, 2009 It's unfortunate, but you could say that about any entity. All's left is reform.I have multiple 'entities' of my own. Are you calling me a failure!? Do I need to be reformed?And what entity will perform the reform? Won't it just fail, too? Link to comment Share on other sites More sharing options...
crunchtastic Posted February 25, 2009 Share Posted February 25, 2009 I have multiple 'entities' of my own. is "entities" just your code word for "personalities"? I knew it, you are crazy. Much like AIG, I'm afraid reformation of The Niche is futile. Link to comment Share on other sites More sharing options...
sevfiv Posted February 25, 2009 Share Posted February 25, 2009 I have multiple 'entities' of my own. Are you calling me a failure!? Do I need to be reformed?And what entity will perform the reform? Won't it just fail, too? No comment! But you could say that about anything or anyone, it doesn't make it necessarily so. There are always wretched ones in any bunch, but I'd take the government any day for regulatory power over a large private entity. Link to comment Share on other sites More sharing options...
TheNiche Posted February 25, 2009 Share Posted February 25, 2009 No comment! But you could say that about anything or anyone, it doesn't make it necessarily so. There are always wretched ones in any bunch, but I'd take the government any day for regulatory power over a large private entity. This is an example of where words that signal absolutes, such as "always," need to be clarified and explained. A one-liner is utterly incapable of summing up the relationship between millions of businesses and a single federal government. Link to comment Share on other sites More sharing options...
Fringe Posted February 25, 2009 Share Posted February 25, 2009 No comment! But you could say that about anything or anyone, it doesn't make it necessarily so. There are always wretched ones in any bunch, but I'd take the government any day for regulatory power over a large private entity. Obviously you haven't heard the term "good enough for government work". Link to comment Share on other sites More sharing options...
RedScare Posted February 27, 2009 Share Posted February 27, 2009 Nice plain English description of the nationalization debate.http://www.msnbc.msn.com/id/29412829/As the article makes clear, there are no easy answers or solutions. Every solution has risks...big risks...associated with it. Link to comment Share on other sites More sharing options...
TheNiche Posted February 27, 2009 Share Posted February 27, 2009 Nice plain English description of the nationalization debate.http://www.msnbc.msn.com/id/29412829/As the article makes clear, there are no easy answers or solutions. Every solution has risks...big risks...associated with it.The article discussed what happens to stakeholders, but I'd suggest that the bigger part of the debate is how the government would fix these institutions and restore them to solvent entities that can be sold back to the private market and stand on their own merit. What I want to know is: who calls the shots, how are they accountable, what are they going to do to repair the entity, what is the government's exit strategy, and how can we ensure that the government will execute that exit strategy on schedule rather than drawing it out for as long as possible?It is tempting to say that accountability ultimately rests with voters, but even very important single issues have a tendency to get drowned out in an election...and I'd suspect that to be especially true when we're talking about high finance, which relatively few voters understand. Link to comment Share on other sites More sharing options...
citykid09 Posted February 27, 2009 Share Posted February 27, 2009 What are the pros and cons of bank nationalization from the perspective of the banks as a business entity?Also from the perspective of fixing current financial problems? Link to comment Share on other sites More sharing options...
TheNiche Posted February 27, 2009 Share Posted February 27, 2009 What are the pros and cons of bank nationalization from the perspective of the banks as a business entity?Also from the perspective of fixing current financial problems?The devil is in the details. The short answer, for now, is that I don't have enough information to draw many conclusions or argue one way or the other.The Scandinavian precedent makes for good reading, and is an example where it worked out well. But there's no evidence from which to conclude that our experience will match theirs. Link to comment Share on other sites More sharing options...
Rammer Posted February 27, 2009 Share Posted February 27, 2009 "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."- Thomas Jefferson Link to comment Share on other sites More sharing options...
TheNiche Posted February 27, 2009 Share Posted February 27, 2009 "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."- Thomas JeffersonThe power of private banks to print money was steadily worn away until about 1910, by which time the Department of Treasury had taken on all matters related to the printing of money.Your quote is irrelevant to the situation. Link to comment Share on other sites More sharing options...
Subdude Posted February 28, 2009 Author Share Posted February 28, 2009 Long but good post on pros and cons of nationalization. The case for and against bank nationalisationHe concludes it is the best way to deal with the zombie banks and avoid repeating Japan's experience. One point in favor not made in it is that nationalization would provide a convenient way to deal with the "too big to fail" problem that both the UK and US walked into. In addition to being split into "good" and "bad" bits, nationalized banks should, at a minimum, have their risk-taking investment banking activities spun off (ie return to Glass Steagall). If necessary, the surviving "good banks" should be further disaggregated so as to not pose systemic threats. A side benefit to ending up with a lot of smaller banks instead of a few behemoths would be to improve competition. Yet another benefit is that nationalization provides the perfect opportunity to throw upper management off of the (gravy) train. As an alternative to being broken up into tiny pieces, the too-big-to-fail institutions should be clearly identified as such and put under a very much more comprehensive regulatory regime than smaller banks. After what has happened it seems only fair to expect that banks (and insurance companies, and GSAs, and car companies..) that only live by virtue of public funds should have a high degree of government oversight. The argument that has been consistently made to support the bailout programs is that banks are different because of their central role in the economy. Fair play, but if large banks are effectively public utilities then that is the model by which they should be regulated. This implies not only strict oversight, but a drastic change in the banking culture which in many ways was at the heart of the problem. What has happened to the financial system is awful, but we're going to have to deal with it, and as they say it would be a shame to waste a good crisis. Link to comment Share on other sites More sharing options...
TheNiche Posted February 28, 2009 Share Posted February 28, 2009 The argument that has been consistently made to support the bailout programs is that banks are different because of their central role in the economy. Fair play, but if large banks are effectively public utilities then that is the model by which they should be regulated. This implies not only strict oversight, but a drastic change in the banking culture which in many ways was at the heart of the problem.Given that there is a consumer surplus associated with nearly any kind of economic activity within any kind of industry, you could make the case that all industries are effectively public utilities which should be subject to the same kind of intense government scrutiny you're discussing here. And if government could be trusted to efficiently and competently enforce such scrutiny, then I could come up with no unreasonable objection. That would be communism, however, and history shows that communism doesn't work. It isn't that government can't physically achieve the same things that firms can, just that corruption, incompetence, power struggles, conflicts of interest, perverse incentives, asymmetrical information, and so on and so forth act against it in every step of the way.It's hard to object to nationalization, whether temporary or permanent, if you buy into the core assumption that economists make in an academic environment, which is that all individuals are rational. This is not the case. And that's why I'm very impatiently waiting for details. I want a competent plan, a committed exit strategy, and accountability. Link to comment Share on other sites More sharing options...
BryanS Posted March 6, 2009 Share Posted March 6, 2009 The argument that has been consistently made to support the bailout programs is that banks are different because of their central role in the economy. Fair play, but if large banks are effectively public utilities then that is the model by which they should be regulated. This implies not only strict oversight, but a drastic change in the banking culture which in many ways was at the heart of the problem. You absolutely hit the nail on the head. And for the regulatory/oversight function, may I recommend Sharky, the regulatory shark: "Banking culture:" You skirt or cheat the system again... this will be your fate. You losers. You just destroyed America's retirement savings. Link to comment Share on other sites More sharing options...
Subdude Posted March 7, 2009 Author Share Posted March 7, 2009 From Big Picture Link to comment Share on other sites More sharing options...
TheNiche Posted March 9, 2009 Share Posted March 9, 2009 I was just watching an interview of Warren Buffet on CNBC. When asked what would be the best approach to deal with ailing banks, he refused to answer. He wanted clarity from the federal government before he was willing to take a hard line. When drilled on it, he actually went on and on for a couple of minutes about the importance of clarity. Someone must've been reading my posts! Link to comment Share on other sites More sharing options...
BryanS Posted March 9, 2009 Share Posted March 9, 2009 I was just watching an interview of Warren Buffet on CNBC. When asked what would be the best approach to deal with ailing banks, he refused to answer. He wanted clarity from the federal government before he was willing to take a hard line. When drilled on it, he actually went on and on for a couple of minutes about the importance of clarity.Someone must've been reading my posts! Warren Buffet is an idiot. Just ask him about his Goldman Sachs "investment"... How do you feel about that stock trade, Warren? Link to comment Share on other sites More sharing options...
TheNiche Posted March 10, 2009 Share Posted March 10, 2009 Warren Buffet is an idiot. Just ask him about his Goldman Sachs "investment"... How do you feel about that stock trade, Warren? That's right BryanS, everybody except for you is an idiot, prone to errors. You are a financial god, the one and only arbiter of truth within that realm. And you're only not a billionaire because you choose not to be. Nobody bats a thousand. I don't pretend that Warren Buffet is infallible. Neither does he. Link to comment Share on other sites More sharing options...
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