Had the bigs been allowed to fail, then small investors with assets in the $500K to $5M range would’ve been kings. Of course, these silly people just save, buy lots of US gov’t securities, play by the rules, and don’t contribute much to politicians.
Well, with regard to the latter, ‘they got what they paid for.’ (Not that I’d ever end a sentence with a preposition; I was paraphrasing an old adage.)
Heaven forbid that these small investors could scoop up at fire-sale prices the assets of the very wealthy. Fight crony capitalism. It’s not political contributions that CAUSE it; it’s gov’t interference in commerce (i.e., too much regulation) that makes it possible. Limit gov’t functions to the basics and you won’t have to worry about political contributions, because much less gov’t meddling in commerce, there will be very little incentive, if any, to contribute to politicians.
Too big to fail? That statement by itself is what is wrong with our country now. We think that there are entities that are too big to fail. Let me tell you all something, There is nothing too big to fail including the US Economy. Keep bailing out banks, Taking over General Motors, then give it away to the unions. Take over our medical system and make rights/entitlements out of thin air and see how our country fails.
Rome failed, the United States can as well! WE WILL BE A THIRD WORLD NATION IN 15 YEARS.
“Republicans bail out Wall Street, then accuse Barack Obama of wanting to bail out Wall Street at some vague unknown future date.”
Sadly, the second part is true but the first part destroys every iota of credibility the GOP ever had on this issue. We’ve got a pot and a kettle screaming at each other on the hill when the reality is they are the each half of the DNA strand making up the virus that’s destroying our country.
Matt – You are right on. There is no such thing as an institution that is “too big to fail”. The sad part is, those espousing the theory of “too big to fail” are exhibiting such hubris as to cause our country to fail. The process is well under way.
The real question should be: Why do we believe any business is too big to fail? This extended play recession is due to trying to avoid the inevitable. The displacement may have been bigger intially, but it would have already run its course by now. Keep the Socialism on the other side of the pond.
I know politicians these days dont understand their roles and the limits the US Constitution places on the Federal Government. BUT THIS IS CAPITALISM AND NATURE, THE WEAK PERISH AND THE STRONG SURVIVE.
The ability to fail is as much a part of capitalism as is the ability to succeed. One side of the equation does not work without the other. Risk & Reward. Unfortunately on Wall Street today there is no risk, only reward.
Hey, ‘Joe’ is my moniker. While I sometimes go by Joe, Defender of the Downtroddened, and other such titles, I’m the original Joe on this blog site.
BTW, yes, I agree with you 100%. Both sides of the equation must be in play or the US economy will go the way of Japan’s. This is what happened and is continuing to be the case in Japan – the regulators just won’t let the big banks fail.
This soon will be China’s problem with its financial institutions.
Too Big to Fail is another fear-based tactic used by elected officials to ram some piece of garbage legislation down our throats. AIG was supposedly deemed “too big to fail” by many of the ex-Goldman Sachs hierarchy (Pauslson, Summers, Rubin). Goldman stood the most to lose if AIG when down. So, when the first bail-out was rejected the Goldman alumni got together with the Dems and GOPers and worked out the back room deal. Too Big to Fail is nothing but a slick concept.
This package of reforms is intended to do one thing: increase government control over the financial services sector. Just as they took control over health care, this is a power move. Saying they are looking after the interests of Americans is pure spin.
Just look at the evaporation of free checking – a great consumer benefit – that is going tyhe way of the dinosaur as banks are told they can’t charge adequately for overdrafts or ATMs.
There are true solutions on the table (I like limiting leverage to 30:1, 25:1, then 20:1 over a period of time, as one solution with a mathmatical basis), but Congress and the “Spread the Wealth Around”-in-chief just want to control another industry.
A dangerous path indeed. New Zealand is looking better every day.
Totally agree. Capitalism is risk and reward. The continued takeovers are not “too big to fail”, but instead a power grab. In WSJ earlier this week, B Frank is pushing for banks to reduce mortages on home loans higher than the value of the homes. Rough estimates were this would cost 700 to 900 billion.
If impemented everyone wins except the bank and, on the surface, the governmet. Loss of taxes…
However the current administration would win because they would take over the financially unstable banking institutions and talk about the horrible mess they received from the last administration.
i thought there already were laws in place to prevent this “too big” concept called anti-monopoly laws.
don’t tell my our legal system has overlooked these laws too? alas, its true, money talks and bullstuff walks. i’m afriad the east coast money folks still run the country.
To Mitch McConnell: No, we never said we don’t want it to happen again when it comes to bail outs of Large businesses. What we said is, “Don’t bail them out.” But no, you didn’t listen to us. So don’t play the game that you are listening to us now. You didn’t listen to us in the first place. If you did, the Ins company I work for would have grown and all of us current employees probably would have been promoted and new ones hired. But no, you kept your friends, the CEO’s, happy and gave them money. I think the communications director should be a representative. Jen Psaki has it right. The only law, which doesn’t need to be a law, is to let big businesses fail. Let them pay for it. And if other businesses fail because they’ve loaned them too much money, maybe they’ll do their own job and audit the financials or just don’t loan as much. Hmmmm Problem solved, but Mr McConnell you and the rest of our disgusting representatives think you are God. Well God will only prove that to be a snare and He has!! You’re not God, so quit tryping to play the role.
The ones too big to fail are the ones who gave money to the politicians and then expect a bailout so they can keep their huge salaries and bonuses! We must stop all political contributions!
There is certainly a battle brewing about regulation. Most that I’ve spoken to agree that AIG and the rest of the “too big to fail” companies should not have been bailed out but there is also a need to be sure that “bets” on things like subprime mortgages are closely regulated. I’ll bet that some of those involved in the derivitive debacle foresaw that the housing boom wasn’t going to last forever but they were also making a fortune for themselves while peddling the ill advised wagers (a/k/a subprime mortgage derivitives). I heard about a surgeon who realized how foolish it all was and bet against the derivitives. I believe that he was selling them short. I understand that he is now a very rich surgeon. Now that is cutting to the chase isn’t it?
Had the bigs been allowed to fail, then small investors with assets in the $500K to $5M range would’ve been kings. Of course, these silly people just save, buy lots of US gov’t securities, play by the rules, and don’t contribute much to politicians.
Well, with regard to the latter, ‘they got what they paid for.’ (Not that I’d ever end a sentence with a preposition; I was paraphrasing an old adage.)
Heaven forbid that these small investors could scoop up at fire-sale prices the assets of the very wealthy. Fight crony capitalism. It’s not political contributions that CAUSE it; it’s gov’t interference in commerce (i.e., too much regulation) that makes it possible. Limit gov’t functions to the basics and you won’t have to worry about political contributions, because much less gov’t meddling in commerce, there will be very little incentive, if any, to contribute to politicians.
Too big to fail? That statement by itself is what is wrong with our country now. We think that there are entities that are too big to fail. Let me tell you all something, There is nothing too big to fail including the US Economy. Keep bailing out banks, Taking over General Motors, then give it away to the unions. Take over our medical system and make rights/entitlements out of thin air and see how our country fails.
Rome failed, the United States can as well! WE WILL BE A THIRD WORLD NATION IN 15 YEARS.
This article needs a re-write.
“Republicans bail out Wall Street, then accuse Barack Obama of wanting to bail out Wall Street at some vague unknown future date.”
Sadly, the second part is true but the first part destroys every iota of credibility the GOP ever had on this issue. We’ve got a pot and a kettle screaming at each other on the hill when the reality is they are the each half of the DNA strand making up the virus that’s destroying our country.
Matt – You are right on. There is no such thing as an institution that is “too big to fail”. The sad part is, those espousing the theory of “too big to fail” are exhibiting such hubris as to cause our country to fail. The process is well under way.
The real question should be: Why do we believe any business is too big to fail? This extended play recession is due to trying to avoid the inevitable. The displacement may have been bigger intially, but it would have already run its course by now. Keep the Socialism on the other side of the pond.
I know politicians these days dont understand their roles and the limits the US Constitution places on the Federal Government. BUT THIS IS CAPITALISM AND NATURE, THE WEAK PERISH AND THE STRONG SURVIVE.
Too Big to Fail = Too Big.
The ability to fail is as much a part of capitalism as is the ability to succeed. One side of the equation does not work without the other. Risk & Reward. Unfortunately on Wall Street today there is no risk, only reward.
Hey, ‘Joe’ is my moniker. While I sometimes go by Joe, Defender of the Downtroddened, and other such titles, I’m the original Joe on this blog site.
BTW, yes, I agree with you 100%. Both sides of the equation must be in play or the US economy will go the way of Japan’s. This is what happened and is continuing to be the case in Japan – the regulators just won’t let the big banks fail.
This soon will be China’s problem with its financial institutions.
Too Big to Fail is another fear-based tactic used by elected officials to ram some piece of garbage legislation down our throats. AIG was supposedly deemed “too big to fail” by many of the ex-Goldman Sachs hierarchy (Pauslson, Summers, Rubin). Goldman stood the most to lose if AIG when down. So, when the first bail-out was rejected the Goldman alumni got together with the Dems and GOPers and worked out the back room deal. Too Big to Fail is nothing but a slick concept.
This package of reforms is intended to do one thing: increase government control over the financial services sector. Just as they took control over health care, this is a power move. Saying they are looking after the interests of Americans is pure spin.
Just look at the evaporation of free checking – a great consumer benefit – that is going tyhe way of the dinosaur as banks are told they can’t charge adequately for overdrafts or ATMs.
There are true solutions on the table (I like limiting leverage to 30:1, 25:1, then 20:1 over a period of time, as one solution with a mathmatical basis), but Congress and the “Spread the Wealth Around”-in-chief just want to control another industry.
A dangerous path indeed. New Zealand is looking better every day.
Yes, exactly right; too-big to fail is the epitome of crony capitalism. The Dems and country-club Republicans love this form of economic system.
Joe,
Totally agree. Capitalism is risk and reward. The continued takeovers are not “too big to fail”, but instead a power grab. In WSJ earlier this week, B Frank is pushing for banks to reduce mortages on home loans higher than the value of the homes. Rough estimates were this would cost 700 to 900 billion.
If impemented everyone wins except the bank and, on the surface, the governmet. Loss of taxes…
However the current administration would win because they would take over the financially unstable banking institutions and talk about the horrible mess they received from the last administration.
i thought there already were laws in place to prevent this “too big” concept called anti-monopoly laws.
don’t tell my our legal system has overlooked these laws too? alas, its true, money talks and bullstuff walks. i’m afriad the east coast money folks still run the country.
To Mitch McConnell: No, we never said we don’t want it to happen again when it comes to bail outs of Large businesses. What we said is, “Don’t bail them out.” But no, you didn’t listen to us. So don’t play the game that you are listening to us now. You didn’t listen to us in the first place. If you did, the Ins company I work for would have grown and all of us current employees probably would have been promoted and new ones hired. But no, you kept your friends, the CEO’s, happy and gave them money. I think the communications director should be a representative. Jen Psaki has it right. The only law, which doesn’t need to be a law, is to let big businesses fail. Let them pay for it. And if other businesses fail because they’ve loaned them too much money, maybe they’ll do their own job and audit the financials or just don’t loan as much. Hmmmm Problem solved, but Mr McConnell you and the rest of our disgusting representatives think you are God. Well God will only prove that to be a snare and He has!! You’re not God, so quit tryping to play the role.
The ones too big to fail are the ones who gave money to the politicians and then expect a bailout so they can keep their huge salaries and bonuses! We must stop all political contributions!
There is certainly a battle brewing about regulation. Most that I’ve spoken to agree that AIG and the rest of the “too big to fail” companies should not have been bailed out but there is also a need to be sure that “bets” on things like subprime mortgages are closely regulated. I’ll bet that some of those involved in the derivitive debacle foresaw that the housing boom wasn’t going to last forever but they were also making a fortune for themselves while peddling the ill advised wagers (a/k/a subprime mortgage derivitives). I heard about a surgeon who realized how foolish it all was and bet against the derivitives. I believe that he was selling them short. I understand that he is now a very rich surgeon. Now that is cutting to the chase isn’t it?