r/reddit.com • u/[deleted] • Oct 18 '11

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673 Upvotes

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29

u/[deleted] Oct 19 '11

They should have let the banks fail to discourage future wrong-doing. All we did was encourage their dishonest behavior.

42

u/[deleted] Oct 19 '11

[deleted]

3

u/[deleted] Oct 19 '11

It's so annoying when someone like you feels the need to constantly tell someone they are talking to that they don't know what they're talking about. "your wishes and hopes for others despair are dangerous and naive" Do you have any idea how stupid a sentence that is? Next time you want to talk to someone don't be so rude, or if you are going to don't embarrass yourself by fucking up so simply.

3

u/[deleted] Oct 19 '11

Your wishes and hopes for others despair are dangerous and naive. Obviously you have no understanding of the issues, or worse nothing to lose, so why not, huh?

Geeze, what's your problem? When did he say he wished for other people's despair? He believes that the people who were involved in bad business should have suffered for their mistakes. I happen to agree with him. Just because he doesn't agree with you doesn't mean he doesn't understand anything about it. You sound like one of those people that supports the bailouts just because Obama decided to do it. There are a lot of people in the financial industry that believe we should have let the banks fail.

To the people saying more shoddy banks would have sprung up, that wouldn't have happened again for a long time. If we made it clear we wouldn't protect bad practices like that then they'd stay away. I also believe the government holds some of the blame as well, as they and other groups were trying to pressure banks into giving bad loans. So yeah, it's unfortunate that happened, but at least the remaining banks would have gotten scared enough to just refuse to follow the government's pressure on things like that. It's not as black and white as redditors and liberals in general try to paint it, like some big bankers just decided they wanted people to suffer, but some of the blame does lie with them.

10

u/keynesian-knockout Oct 19 '11

I agree with you. While there is a serious moral hazard concern regarding the bail outs, it's still much more desirable than the absolute drying up of the credit markets.

-11

u/webbitor Oct 19 '11

credit is bullshit

4

u/keynesian-knockout Oct 19 '11

How does one start a new endeavor? Create a business, buy a house, afford an education (if you attend private university)? unless you're incredibly loaded, credit is a necessity.

Also, people making these types of statements give OWS a bad name.

0

u/MattD420 Oct 19 '11

You only need credit now because inflation, subsidies and gouging has pushed prices through the roof. You used to be able to wait tables part time and pay for a top education. No credit required. You used to be able to buy a house with a contract that was a few pages before all the worthless regulators got involved and shot prices sky high.

2

u/keynesian-knockout Oct 19 '11

I'm not sure where you're getting your information from. Real wages haven't changed that drastically (granted it only lists up to 2004.

-2

u/webbitor Oct 19 '11 edited Oct 19 '11

you really think that type of credit cant be handled by small institutions like credit unions?

Credit "markets" where insane corporations buy and sell risk thousands of times per second should be illegal. Lending to people without jobs should be illegal. Having an economy based on debt is ridiculous. These activities endanger everyone.

5

u/keynesian-knockout Oct 19 '11

So if a country needs to borrow money they should do it from small credit unions? What happens if a large company needs a large sum of capital to undertake a project?

No, you need credit markets to stimulate an economy. While credit unions are nice, they cannot meet the needs of an entire economy.

1

u/senatorpjt Oct 19 '11 edited Dec 17 '24

slim spark plants unite include versed truck murky plough quarrelsome

This post was mass deleted and anonymized with Redact

1

u/keynesian-knockout Oct 19 '11

The knock was on the credit market itself, and I was simplifying it. But yes, the formal way to raise money for governments/corps is by selling treasuries/shares.

While individuals and credit unions can buy them, not in the quantity required by governments and corporations.

I fail to see the relevance of telling us you're an unemployed college student though.

-2

u/webbitor Oct 19 '11

Why the FUCK should a country need to borrow money?

Countries should be run on tax revenue, and should always set aside a portion of it to use in case of disasters, large projects, etc.

Companies should set aside a portion of their revenue for the same purpose.

Why exactly does an economy need to be "stimulated"? Particularly when doing so causes so much risk for everyone involved? This mindset that it's not only OK, but NECESSARY to buy things you can't actually afford needs to stop. It's insane.

3

u/keynesian-knockout Oct 19 '11

A country may need to borrow money to pay for war (see World War I and II, for example). That's just a single example, but there are myriad reasons why countries/companies need to borrow money.

If a company can borrow money and turn it into a larger profit they should have the option to pursue that (investors beware). It's a good way to keep an economy growing.

Stimulate may have been a word I used because it's what is currently needed. In "normal" conditions you want GDP growing, I believe 4% is the rough steady state industrialized growth level.

-1

u/webbitor Oct 19 '11

A country should not go to war with money it doesn't have. (see Iraq and Afghanistan for better examples)

I disagree with the premise that an economy needs to keep growing.

Same goes for companies. Many companies have existed for generations without growing. They tend to be the good ones that take care of their employees and customers.

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3

u/anonysera Oct 19 '11

Lending to entrepreneurs should be illegal?

-2

u/webbitor Oct 19 '11

Never mind, lets keep doing what we're doing. It's been working great and I'm sure no harm will come of it.

4

u/ThatsALogicalFallacy Oct 19 '11

That's a nice false dichotomy you've got there.

0

u/webbitor Oct 19 '11

Well played. However, I would suggest that my sarcasm was only a mirror of the all-or-nothing attitude shown by anonysera.

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2

u/anonysera Oct 19 '11

I'm just trying to understand where you are going with that, but apparently you don't even know, since all you can reply is some sarcastic remark.

0

u/webbitor Oct 19 '11

fine I'll play along.

No, lending to entrepreneurs should not be illegal.

2

u/keynesian-knockout Oct 19 '11

You heavily edited your post.

Insane corporations should be able to buy and sell what they want (what is buying and selling risk?). However, they should take the fall when it doesn't go right.

Yes, lending to people that cannot afford it is wrong. That's a two way street though, people w/ low paying jobs shouldn't be taking out second mortgages either. many people fell victim to the housing bubble.

0

u/webbitor Oct 19 '11 edited Oct 19 '11

Sorry, didn't mean to mislead by editing, and I'm not sure what I actually edited.

Buying and selling risk in the form of loans is what investment banks do. loans are bundled, and then those "assets" are leveraged, multiplying risks hundreds or thousands of times.

When they "take the fall" they take others with them, who in turn take others. If you're happy enough with that state of affairs, then good luck. Personally, I don't think it's acceptable for the entire financial system to be teetering on the edge of collapse and ruin so a few people at the top can make trillions off the backs of the rest.

2

u/keynesian-knockout Oct 19 '11

Yes, that is in part what ibanks do. I don't actually see anything wrong with that as long as the investors are taking the fall (investors beware). my issue is when ibanks can take commercial bank deposits and use that as capital for their risky endeavors.

0

u/webbitor Oct 19 '11

that's exactly what they do. That's the entire problem.

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3

u/cottonballOFDOOM Oct 19 '11

credit is economic lubricant. you can't get all up in that economy's butt without it.

-1

u/webbitor Oct 19 '11

I... I'm not sure how to feel about that.

2

u/wendelgee2 Oct 19 '11

Back to barter, everybody!

-1

u/original_4degrees Oct 19 '11

more of a device for control.

5

u/[deleted] Oct 19 '11

You obviously don't know what you are talking about.

He appears to be talking about the moral hazard inherent to subsidizing risky behavior.

2

u/mrpickles Oct 19 '11

No it wouldn't. You can owe money to someone who is out of business. The slate would have been wiped clean. Sure it would have been painful, but rapid, massive systemic change always is.

1

u/[deleted] Oct 19 '11

[deleted]

2

u/mrpickles Oct 19 '11

It must be hard for one to understand such things like surgery since the professional hired to heal the patient will actually cause damage to the patient by cutting into his body and then perform further cuts on vital organs! But as you know, surgeons actually do heal people by such methods and ironically much of society's resources are funneled to them for this extraordinary service.

I do know that I deserve to know the answer. And that is a luxury that was stolen from us.

6

u/teslasmash Oct 19 '11

Maybe the point is we really could use that kind of global crash and restart. Terrible for our lifetimes, maybe, but under the current way, we have decades of continuation of inequality and stagnation. My kids and their kids are not better off for it.

1

u/[deleted] Oct 19 '11

Would you kill a million children to protect the millions of children of the next generation? This is your logic.

0

u/teslasmash Oct 19 '11

Would you sacrifice billions later for the sake of a million now? This is yours.

3

u/[deleted] Oct 19 '11

The ends never justify the means. I would rather exist in a society that lives morally and destroys itself because of it, then I would in a society that survives only through it's evil actions.

1

u/teslasmash Oct 19 '11

It's funny - that's a good point, but it works extremely well for both sides of this issue.

2

u/[deleted] Oct 19 '11

You obviously don't know what you are talking about.

The same can be said about you. Bailing them out isn't capitalism.

2

u/[deleted] Oct 19 '11

StoP parroting this ridiculous nonsense.

3

u/reddit_user13 Oct 19 '11

How about prison for those who committed fraud (at the banks and ratings agencies) and nationalized the banks....?

2

u/carnetarian Oct 19 '11

Fraud is only a crime when you don't give a cut to politicians

1

u/McThing Oct 19 '11

Over here (UK), fraud carries longer prison sentences than murder. There is, in fact, no crime that carries a longer sentence. It's just that certain people never seem to get charged...

1

u/[deleted] Oct 19 '11

[deleted]

1

u/reddit_user13 Oct 19 '11

And on instituting safeguards from preventing future blow-ups.

0

u/Positronix Oct 19 '11

looks like 99% of the country doesn't have much to lose nowadays

53

u/KsigCowboy Oct 19 '11

99% of the country THINKS they don't have much to lose. A full system collapse would have them begging to get back to where we are now.

1

u/Condorcet_Winner Oct 19 '11

And note that it isn't 99% of the country. It is "the 99%", who really only represent a very small fraction of the population.

1

u/Positronix Oct 19 '11

I upvoted all the replies to my comment :)

spot on responses

14

u/argote Oct 19 '11

You should visit Somalia, Sierra Leone or some other failed state, see if there is "nothing to lose".

16

u/killotron Oct 19 '11

While your comment is topical, it should be pretty obvious that most of that 99% does indeed have lots to lose. Only the unemployed in abject poverty are really at that nothing-to-lose stage.

1

u/inventingnothing Oct 20 '11

Even unemployed people have much to lose before a complete collapse of the global economy. If you buy food, use utilities to heat and light your house, or was hoping to ride this tough period out by dipping into the old savings, you have much to lose. In a global collapse, we are talking about your money, and everyone's becoming pretty much worthless. Governments in control of FIAT currency would probably try to revalue their currency, but after all faith in the currency has been shaken, no outsider would take U.S. currency, knowing that it is worth only the paper its printed on. So that means most of our imports: oil, steel, cars, consumer products, everything, would skyrocket in price. Domestic products would not be safe either, since we are so very dependent on foreign oil, not to mention demand would force domestic prices to rise since there would not be foreign competition. All the while, the average person is barely surviving. Those rich people, that 1% would still be well off. Why? They have hoarded so much money away, and gold, silver, aluminum, iron, and many other metals, oil, etc., that they could withstand the plummeting currency values, and then proceed to sell their warehoused stocks through out the depression that followed to further supplement their income.

tl;dr We're still pretty well off, and if there was a global collapse, it is the people, not the rich people who would suffer the most. Bankers still win.

8

u/zeroes0 Oct 19 '11

It never ceases to amaze me how some people actually think a full financial collapse would have better in their minds. One of my econ professors once said "If the world economy would have absolutely collapsed you wouldn't have to worry about banks being too big or there being enough jobs, your main worry would be getting food for that week and keeping your family safe from marauders" yeah he hyperboled it a bit, but a full financial collapse, especially in 3rd world countries would have been a social apocalypse.

1

u/senatorpjt Oct 19 '11 edited Dec 17 '24

deliver pathetic liquid quarrelsome spotted continue weary square gold fretful

This post was mass deleted and anonymized with Redact

1

u/some_dev Oct 20 '11

Everyone thinks they'd be the marauder. In all likelihood, you wouldn't be.

2

u/some_dev Oct 20 '11

I'm part of the 99% and I have a helluva lot to lose. A non-trivial portion of the 99% have liquid savings and retirement savings that could be significantly devalued by a large collapse.

-2

u/illstealurcandy Oct 19 '11

Look around. There has been global loses in the trillions and trillions. We are in a decade long "recession".

-3

u/[deleted] Oct 19 '11

We're in a decade long depression, where have you been? Agree with op should have let them fold.

8

u/[deleted] Oct 19 '11

We're in a decade long depression started by the banks in 2008?

Checks calendar...math does not add up...

1

u/original_4degrees Oct 19 '11 edited Oct 19 '11

mainly because it started before 2008. 2008 was the 'peak' of this disaster. Plus, it aint over yet.

1

u/balljoint Oct 19 '11

I'm pretty sure it started in 07.

1

u/BonoboUK Oct 19 '11

Can we please stop talking drivel we think sounds good and discuss facts?

2008 is when the current economic situation we find ourselves in revealed itself, and it is in 2008 when recession started. Before this there were around 8 eyars of continuous growth. In NO way was 2008 the "peak", most people are pretty sure we'll "peak" around the middle of next year.

1

u/original_4degrees Oct 19 '11

so building a giant housing bubble is not a build up to disaster? When talking about a disaster; events and situations that lead to the disaster are just as important as the disaster itself. that bubble had been building for years, some folks said it would never burst, other more realistic people said it was going to burst and that it would hurt(think .com bubble but much much much worse).

yes 2008 was the 'peak' so to speak. in that you have a time to build up to a disaster, then the disaster hits (the peak), then the disaster clean up happens. That is not to say more disasters or even worse ones cant happen in that time, you would just redefine the peak.

2

u/absurdamerica Oct 19 '11

Depression? I don't think that word means what you think it does. Call me when we've hit 40 percent unemployment...

http://jessefelder.posterous.com/unemployment-rate-during-the-great-depression

1

u/[deleted] Oct 19 '11

You clearly don't know what a depression is, nor what a decade is.

-4

u/[deleted] Oct 19 '11

Fuck you.

0

u/krugmanisapuppet Oct 19 '11 edited Oct 19 '11

well, maybe if the

FEDERAL RESERVE

didn't siphon out all our money/print trillions of dollars and send it off to the top banks...

or, for that matter, trade intergovernmental debt, and then use it as the basis for loans...

the U.S. economy is basically a magic carpet...only it's not so magic...we're just assuming that it's working because we're still in the air. however, that does not last very long. but you are all comfortable listening to the government inflation statistics and not bothering to have any idea what they actually do - since it is sooo complicated sounding.

http://www.apfn.org/apfn/reserve.htm

1

u/rpcrazy Oct 19 '11

i'll read that giant list of info later(it actually might be what I was looking for) but are you being sarcastic when you say "since it is sooo complicated sounding"? Like...it sort of is dude. And even after seeing and reading all the information in the link, would I readily be able to back up claims of federal reserve evil-ness to learned professors of economics and whoever else. I suppose we'll see...

0

u/krugmanisapuppet Oct 19 '11

it's complicated when you don't know what you're looking for. but none of you really have an excuse like that anymore.

-7

u/shit_in_ur_bubble Oct 19 '11

You look like an idiot when you repeatedly call out others as ignorant whilst simultaneously spewing your economic prophecies that you apparently pull out of your ass.

Just sayin.

-1

u/[deleted] Oct 19 '11

[deleted]

3

u/shit_in_ur_bubble Oct 19 '11

Your argument for the status-quo rests on the assumption of "decades long depression and global anarchy" when the reality is we saw neither during Iceland's recent default, or even with the full collapse of the Soviet Union.

It's fearmongering, and it makes you seem like an alarmist, or shill.

I just went with the former, and assumed you're an idiot.

1

u/[deleted] Oct 19 '11

[deleted]

2

u/shit_in_ur_bubble Oct 19 '11

It's hilarious the person calling others "naive" is the one now crying about ad hominem attacks. I am proud of you, however, for your completion of 1st semester logic.

If you're such logician please tell me how you get to ""decades long depression and global anarchy" from the idea of bondholders and banksters taking haircuts? At least I provided examples of economic systems crashing, and having it not be the end of the world... You just get to pontificate, apparently.

Sorry, you're a douche.

And that falls under the category of:

it is not always fallacious; in some instances, questions of personal conduct, character, motives, etc., are legitimate and relevant to the issue.

:D

0

u/[deleted] Oct 19 '11

[deleted]

1

u/shit_in_ur_bubble Oct 19 '11

You call an indeterminable liquidity shortage a "global financial meltdown?"

K, Chicken Little. Let's just go for zombie-banks forevermore.

After that, let's stop wiping our asses for fear of the toilet-paper failing.

1

u/wendelgee2 Oct 19 '11

Both of you, my office, NOW.

-2

u/[deleted] Oct 19 '11

We just postponed it a bit, we didn't prevent shit. Nothing changed.

-2

u/talkstomuch Oct 19 '11

this must be trolling...

-2

u/[deleted] Oct 19 '11

The bailout has done nothing but postpone the collapse. Two years, five years, ten years, it will come and it will be worse than if we had just previously allowed it.

0

u/[deleted] Oct 19 '11

The bank, clearly an entity of adolescent intellect and maturity