This lady GETS it

The first comment merits replication:

Fri, 01/15/2010 - 15:17 — Alice X - Choms...

This is a doom loop.

The politicians shovel trillions (much more than just TARP, see FDIC and Federal Reserve) to the Banksters who make billions in profits, thereby declaring themselves geniuses deserving enormous bonuses, a whopping 40% of the profit.

The Banksters then shovel millions in campaign contributions to the politicians who buy slick Madison Avenue spots to sell the plunder to the plundered, who re-elect said politicians.

Rinse and repeat.

Welfare for the Rich, Crony Capitalism and Plunder Politics.

 

this boils my blood...

 

I think the majority of Americans get it. This is just one of those self-evident principles that only a congressman could eff up.

 

so many people link favoring 'big business' with favoring the free market.
big business uses their size and clout to shut down competition, to regulate away competition, to grease the Congressional wheels for their continued subsidization.

as for the banks, every bank that qualifies as a 'systemic risk' must have a living will. if citigroup deteriorates again, they should have a plan for putting their wealth management business immediately on the selling block, IPO'ing their retail banking brand. this is how gov't should be regulating them, not simply allowing them to know they will get the gov't teet forever.

 

Deutsche Bank's Josef Ackermann at Davos says "if you take on too much risk you should be allowed to fail" WHAT A CONCEPT! They're even talking about the "real" economy. Not bubbles, not short-term Wall St. paper gains. We don't even know what a "real" economy is any more. IMO that's a major part of trying to get out of this morass.

http://www.nytimes.com/2010/02/01/business/global/01iht-davosjobs.html?hp

 

What Is To Be Done?

No they don't. If they did, they'd demand the right changes to the system. Instead, all we get are idiot teabagger stooges of the business elites who run this game on us and then blame "the government".

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What are you, some kinda communist?

Seriously, what's your answer to the problem "big business"? Do we stop businesses from growing after they reach a certain size? Do we go repeal the corrupt activist judicial decisions of the late 19th century and back to our funding Fathers' conception of how corporations should be regulated by restricting charters? Do we finally admit that corporations are not people and that the people who own the corporations are perfectly capable of freely expressing themselves as individuals and don't need to ALSO be able to make brib... er, I mean, "campaign contributions" through their control of corporate assets that takes money away from other shareholders?

This is one reason I can't take "libertarians" seriously. They'll do everything they can to avoid admitting that the absurd concentration of unaccountable private power in the USA is one of the biggest problems we face as a society and that this concentration is the root of many other problems, including our broken political system and all the problems THAT creates. Instead, it's all "the government's" fault and so all "libertarian" answers to our problems will only make things even worse.

So how do you operationally define a "systemic risk"? Who gets to make that definition? How do you protect against foreign institutions that create systemic risk, seeing as our companies don't trade in a hermetically sealed US-only vacuum? At what point does the state force a business to disgorge its "wealth management business"? And how do you operationally define a "wealth management business", anyway? And who will they sell the IPOs to? What makes you think the people who buy the IPOs won't be as bad, indeed won't be the same people, who mismanaged the firm in the first place? What if the only buyers are foreign? Do you really want the Saudis, Bahrainians and the Chicomms to own our financial system?

What we need to do is scrap GLB and start over. We need to go back to making businesses focus on their core competencies by defining what it means to be a "bank" or even a "money center bank", to be a "broker/dealer", an "investment bank", the various kinds of market makers for stocks, money market commercial paper, derivatives and other speculation products, etc. and making them stick to those businesses. We need to tighten up regulations on capitalization, speculating with borrowed money, pricing securities, accounting standards, etc. We need to make sure that the people who runs our financial industry understand what they're trading through tougher licensing, continuing education, etc. We need to rationalize compensation methods that balance rewarding short-term and long-term performance. We need to better regulate the mortgage industry which is still the Wild West and who, the instant things get better, will go right back to the same abuses that helped create the current mess in the first place. And that's only part of the changes we need to make to just the financial industry itself.

I can guarantee you that the financial industry poobahs will fight all of these changes toot and nail. Under the current rules of game, they'll win, of course, since most Americans don't get it and are therefore easy prey for demagogues like Limbaugh, Beck not to mention Ron Paul and his fanboys, they can buy all the media, create all the "grassroots" organizations like the teabaggers, and bribe all the politicians they need if that's what they'll need to get their job done. And this is where we get to "the government" as part of the problem since, like our mass media system, it is now firmly in the hands of the plutocracy who run it in their interests and not ours. "Throwing the bums out", of course, will only usher in new "bums" since the system demands "bums" and will eject anyone who is not a "bum". Even Obama is a "bum" in that he will not challenge the plutocracy except in little baby steps. How do we try to fight this? I have some ideas, but you probably won't like them so I'd like to hear yours, preferably as specific as possible.

 

So we all go back to the barter system and live in caves? I mean, if I was a megarich global elite like Ackermann, I guess I wouldn't worry too much about global economic collapse since I could still afford food, water, a private army, etc.

 

Which is of course the exact opposite of his position 9 or so months ago. But for Ackermann it's all about making Ackermann look good anyway, if public opinion changes so will his.

 

Re: What Is To Be Done?

Oh is that the problem...

 

Re: What Is To Be Done?

Well, do YOU want to face the awesome might that is....



You must be a brave, brave man.

 

No, back then he took just the right amount of risk, so his bank should have been saved.

The right amount of risk being what everyone else was taking.

 

Well his bank didn't need saving nor got direct support, so he definitly did take the right amount of risk. Of course nobody knows if this would still be true if other major banks were allowed to fail.

 

Maybe BIG FAT LIE is to strong. It came thru AIG (like Goldman) so it wan't 'direct'.
http://online.wsj.com/article/SB123638394500958141.html

Of course his bank was bailed out. He is an abject failure and should be washing dishes in a Swiss Chalet right now. But no.....

 

His bank profited only indirectly, but either way - he was pretty much ok with the bailout in 2009:

http://www.spiegel.de/international/business/0,1518,653233,00.html

 

I just don't understand this "we're all going to have to barter if banks fail" meme that is just about a knee-jerk reaction to letting banks go out of business.

Banks go out of business every fricking week, and the FDIC steps in, their assets are sold off, and people lose their jobs, and the economy does just fine, thank you.

 

What we have here is a failure to communicate

Our economic system is built on credit. Businesses need it to survive. Trade depends on it and has since the first stirrings of the market economy in the middle ages.

All the financial institutions are to a degree interconnected. Your bank may be fine now but if its trading partners collapse and they have nobody to act as counterparty to trades, it will collapse too even if it "wasn't their fault". In this past crisis, we weren't talking about just a few rural mom and pop banks failing. We were talking about the whole damn system. Around the world. Do you like standing in breadlines and sleeping in Hooverilles? That's where we were headed if the governments hadn't stepped in. Seriously.

Your post is perfect proof of how first Bush and now Obama have failed to communicate the situation to people ignorant of economics in a way such people can understand and believe.