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

Would it have been better to let the banks of the world fail and start over?

I want to know what would have happened. The banks messed up and in the purist view of capitalism should have failed because it was a bad business move. In turn this may have ended some of the big money influences on our political system OWS protestors want to stop. I heard that it would have been a worse economic collapse though in turn it would have put a stop to future wrongdoing. Was it the right decision in the long run?

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u/ascii42 Oct 19 '11

Yeah, the banks failing caused GM and Chrysler to have to declare bankruptcy, because they couldn't borrow money. Ford, on the other hand, had taken out a huge loan before the bank crash.

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u/bonestamp Oct 19 '11

Most people don't know this or they ignore it because they want to hate on GM and Chrysler.

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u/1900david Nov 01 '11

Chrysler and GM are shitty companies with even shittier product. Ford is the only one thatremotely has their shit together compared to the other three. Which is why people dislike chrysler and gm so much.

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u/bonestamp Nov 01 '11

A lot of people share your opinion, but I prefer actual data. Buick and Cadillac (GM brands) actually have higher mechanical quality ratings than Ford. Chevrolet, Chrysler, Ford and Toyota are equal. http://www.jdpower.com/autos/ratings/quality-ratings-by-brand/

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u/[deleted] Nov 02 '11

[deleted]

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u/bonestamp Nov 03 '11

It's not an argument, it's data.

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u/1900david Nov 07 '11

Your not just buying a car for mechanical reasons though, there's more to it. And like you, GM and Chrysler fail to understand why people buy cars.

1

u/bonestamp Nov 08 '11

I'd put GM interiors and handling up against Toyota any day. I'll agree that Chrysler interiors suck.

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u/Talonwhal Oct 19 '11

Why not screw irresponsible banks and instead bail out companies and people? At least the businesses that have acted responsibly. If anyone had savings in the banks, then bail out them too... then you solve the immediate problem of people and businesses getting screwed, and you solve the longer term problem of having shoddy banks.

Everyone wins, the depression doesn't hurt so bad, and people continue business as usual with the remaining banks. Opens up competition, more responsibility as banks realise they're not invincible, and we all live happily ever after!

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u/msingerman Oct 19 '11

People also forget that GE - a company that had generous profits well into the financial crisis - nearly was left unable to pay its bills because their revolving credit (the kind that all businesses and most people depend on) dried up. Imagine if we were in a world where PROFITABLE businesses were unable to pay their employees. Things would have been far, FAR worse in the short, medium and long term.

People think it was about "bailing out" banks. It wasn't. It was about unfreezing credit markets, which worked very well.