Is the bailout a good idea?

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cliffski
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Re: Is the bailout a good idea?

Postby cliffski » Wed Nov 12, 2008 3:03 pm

It's just amazing isn't it? If I sell more games, I make more money, but If I screw up and release a crap game, I have to get by on economy biscuits and potatoes. I wish the same rewarding success and punishing failure system actually applied to the banking system :(
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Re: Is the bailout a good idea?

Postby sambrookjm » Thu Nov 13, 2008 1:02 am

cliffski wrote:It's just amazing isn't it? If I sell more games, I make more money, but If I screw up and release a crap game, I have to get by on economy biscuits and potatoes. I wish the same rewarding success and punishing failure system actually applied to the banking system :(


Surprise! It's not just the baking system anymore... American Express, the auto makers, and lots of other companies are either going for a piece of the bailout pie, or are being reclassified as banks so they can get some of it.

http://money.cnn.com/2008/11/12/news/ec ... /index.htm

I hate being right about things I don't want to be right about...
I think I've had this deja vu before.
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cliffski
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Re: Is the bailout a good idea?

Postby cliffski » Thu Nov 13, 2008 2:54 pm

I wish positech was "too big to fail" :D
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Re: Is the bailout a good idea?

Postby rboni » Sat Dec 13, 2008 4:27 am

I have found an interesting article about creating an international clearing union that also puts the bailout into perspective.

http://www.taipeitimes.com/News/editorials/archives/2008/11/21/2003429164
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Re: Is the bailout a good idea?

Postby rboni » Sat Oct 10, 2009 9:25 am

If these companies get bailed out then the government should take them over and restructure them by spliting them up and reselling the different parts seperately so that they stop being too big to fail.
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Re: Is the bailout a good idea?

Postby shoe1985 » Wed Oct 14, 2009 4:30 pm

rboni wrote:If these companies get bailed out then the government should take them over and restructure them by spliting them up and reselling the different parts seperately so that they stop being too big to fail.


I agree 100%.

When you are a company being called Too Big Too Fail, well, I don't want to know what happens if you do fail. We are lucky right now because if we let these companies go under, it could be much much much worse.
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Re: Is the bailout a good idea?

Postby Winterwolf00 » Sun Jul 25, 2010 7:45 am

This is an example of Privatizing profits and socializing losses, whenever the big corporate fat cats take a risk and it pays off they keep all the money to themselves and give themselves a nice pat on the back. But when that risk takes a bad turn, they demand the taxpayers bail them out. It's been going on since for ever (I bet they caused the Great Depression) and they will keep on scamming the American people unless Washington nationalizes the banks. OK I'm done ranting.
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Re: Is the bailout a good idea?

Postby Artos » Thu Aug 19, 2010 9:36 pm

EDIT: I just saw that I responded to a post that ressurected an older thread. Whoops! But it's interesting, seeing some of the initial observations made in '08 and how they're more or less on the money today (it'll lead to more bailouts/new Keynsian order/etc)

Winterwolf00 wrote:This is an example of Privatizing profits and socializing losses, whenever the big corporate fat cats take a risk and it pays off they keep all the money to themselves and give themselves a nice pat on the back. But when that risk takes a bad turn, they demand the taxpayers bail them out. It's been going on since for ever (I bet they caused the Great Depression) and they will keep on scamming the American people unless Washington nationalizes the banks. OK I'm done ranting.


Well, part of what's going on IS in the name of nationalization - the government didn't have to pick up majority stock in General Motors, they could have let it go through a normal bankruptcy. The same is true for many of the banks that were bailed out - the government didn't have to, and some of the banks didn't even want to. However, because the government DID want to, the banks had to, and now the government is bigger than ever.

The whole reason the subprime market got screwed up was because the Federal government told the banking community that it would take on all the risk, through the FHA, Fannie-Mae, and Freddy Mac. If the banks had had to be accountable for the risk themselves, it likely wouldn't have happened. There's also no such thing as a company that's too big to fail; if a company fails, it fails for a reason, and ignoring that will only lead to more problems down the road.

For a perspective on the Great Depression, I like to turn to Dr. Walter Williams, professor of economics at George Mason university:
http://econfaculty.gmu.edu/wew/articles ... evancy.htm

He also hosts a pamphlet on the Great Depression: http://econfaculty.gmu.edu/wew/articles ... ession.pdf

In short, the Great Depression was caused by the Federal government and governmental policy, much like our current recession. Yes, there was a major market crash in October of '29, but it was primarily because the Federal Reserve bloated the money supply by 60% from '21 through mid '29 (the 'roaring twenties' were possible due to cheap/easy money provided by the Fed) and then, fearing inflation, sharply contracted the money supply, doubling their interest rate and taking aggresive action to reduce the money supply by 30% over the course of about three years. Naturally, a reduction in the supply of money causes prices to drop (dollars are more scarce/worth more per dollar), and when the government started panicking over the drop in the stock market it began passing more (damaging) legislation that drastically extended the recession into a depression, and made it the Great Depression.

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