Forum Post: Different point of view
Posted 13 years ago on Nov. 20, 2011, 12:20 a.m. EST by Skmdr
(6)
This content is user submitted and not an official statement
I have a question regarding the bank bail out. Let's say the government did not bail out the big banks lets think what would have happened. You would have had a massive devaluation of the dollar, the down turn we saw in 2008 would have been 100 times worse and it would be many many years for recovery not to mention thousands of jobs lost not by the 1% but by the thousands of people looking to support their family like everybody else. Let's think about what the results of the bail out was. While places like Lehman and Bear Stearns failed many banks were able to survive, jobs were saved and by the way the government sold the stock they got for millions in profit so it seems to have been a win, win, win for all of us. Yes law makers should have never let the laws that were passed put banks in the position with the debt but at the point of failure what else could the government have done? It's kind of ridiculous when I hear people say 'what about my bail out'. Do any of you think the global impact to the economy is the same for an individual to get into money trouble? Regarding the evil of the 1%, why is it wrong for a person to do well in school make it to an ivy school and do well in business while not breaking any laws. Don't tell me anybody in 2006/7 would be thinking about social responsibility if you worked you ass off in school and were being rewarded for in your business. I could go on but the questions I ask are serious questions, I am not shooting at anybody. I would like to understand different points of view and also how does blocking people from going to work and school help the cause? Again serious question. (btw while I think most of the police action is correct I have seen some abuse of power so I am with you on that specifically the pepper spray at uc davis)
Since you are looking to understand other points of view, I'll take your questions one at a time and express my own variant points of view:
No one can know the answer to this, as we have no crystal balls. We are not even sure what the outcome of the bailouts is going to be. This ball is still in play and has, in fact, barely made it over the net. I can only suggest the following. The U.S. government has spent about $2 Trillion dollars on economic recovery, much of it in the form of bailouts. That amounts to about $25,000 for every household. If the banks were allowed to fail, certainly not every household would need bailing out. So, there should have been plenty of money to give directly to the victims of the bank failures. That would allow the bad banks to die for their sins and would protect the innocent from the fall-out. Whether that solution would prove any better, I cannot know; but it would have been more fare by not rewarding failure and corruption with free money.
We have had a significant devaluation of the dollar that is yet to play out. The government has created over a trillion dollars on paper (not in printed money) to do what they call "quantitative easing." They did this to try to stimulate banks to give cheap loans so that we could go right back to the old debt-based economy. The banks have not given those loans but have held the money in their accounts to balance their books. That means the money has not gone into circulation, and that completely explains why you have not seen "massive" inflation in prices (domestic devaluation of the dollar). Until the money goes into circulation, it cannot have any inflationary effect on the economy. When it does, its effect may be uncontrollable, as it is hard to take that money back out of the economy of it is too much.
The downturn we saw in 2008 is still playing out and WILL get worse. It is hard to say how much worse, but we are far from in the clear with many more homes to be sold after foreclosure, problems we created for Europe about to rebound onto our own soil (like a tsunami bouncing back at us), etc. There is no question that the Great Recession of 2008 will continue for many years to come. Those who think it ended, are merely parroting government statements. How can it have ended when the same unemployment continues at even greater levels, and the same causes of massive debt are still unresolved, the same banks still at risk of failure, etc.? As for the jobs lost, no one even knows the real number. Unemployment only measures those on the unemployment roll. After so much time, you are disqualified and drop off the roll. That doesn't mean you are now employed. So many hundreds of thousands if not millions of people have dropped off the roll just from overextending their benefits, that real unemployment must be, at least, 16% by now. I would not be surprised if it is more. The government does not care to know, as its problem in dealing with just the number that is receiving benefits is great enough.
I don't know about how the government did on all stocks. It may have made money on some. What I do know is that many of the banks that "paid back" their loans did so by taking out new loans that were not disclosed. Earlier this year, Congress required the Federal Reserve to reveal more information about the funds it is moving and found that Bank of America and others paid back their KNOWN loans by receiving even larger loans off the record from the Fed. Because the Fed is allowed to work under cover, this was not considered fraudulent.
--Knave Dave http://TheGreatRecession.info/blog
It got much to late so I am back with another question. Let me say again I am looking to understand another point of view not casting stones... This is more of a question - I am from NY so specifically to the activities in the city I understand the cost to the city has been around 10million dollars so far to police and keep things somewhat orderly, funds that I would guess comes from the city's budget for teachers, firemen, services for the poor etc.. It seems like you only have more of the same planned over the next weeks so where does the cost to the city end? 20m, 50m? How do you feel about the strain you are putting on the city's budget?
http://www.youtube.com/watch?v=iGPWBkFL_h0
you should watch this video..
Thank you for the link. Yes I agree with most if not all of the interview what I don't get is how stopping traffic and not letting people go to work and sleeping in the street helps this. Maybe that's simplistic but I think that's the question most of America has.
While I understand your points I guess that's what makes America different points of view. Let's jump to the end of my post, how does stopping to '99%' from going to work and school on wall street this week and causing people to be stuck on bridges for hours help? I understand the get in your face actions but I think people watch the news and read the paper and know the basics of what your fighting for and seem to opt to go to work rather than marching. Whats the point of stopping people from their day. Again not shooting asking?
it causes an awareness .. this in turn leads to discussion ... this in turn leads to political upheaval and change. do you really think writing a letter to your congress man is going to change anything.
No but I don't think stopping people from going to work does anything either. As I read more posts here I see somebody talking about causing problems for retailers the day after thanksgiving. I just don't get it but that's okay. We all go about solving problems in different ways
Thanks for your post!
I'll speak for myself, at least, by saying that I did not oppose bailing out the financial industry 2008. It was an unpleasant thing to have to do, but necessary. It's struck me that one of the (many) differences in opinion between OWS and the Tea Party is that the latter thinks the bailouts never should have happened to begin with, while the former accepts that they did but, as you put it, wants a bailout of their own.
This is the way I look at it: we spent hundreds of billions of dollars to clear bad assets from the financial industry's books so that they could return to normal function. And they have done so. But no comparable effort to get average Americans back to normal economic function has been made. The closest we've come is a half-assed mortgage assistance program and a stimulus bill that relied far too much on tax cuts (which are effective, but, in comparison to more direct spending, simply don't return as much bang for the buck).
The reason it's important to get individual, average Americans back to normal is because while you're correct that just ONE person with "money trouble" doesn't have a significant impact on the global economy, an entire nation of individuals with "money trouble" does. Insofar that a nation of individuals not spending money on things -- because they have no money to spend -- prevents our economy from growing out of recession.
As for our second question, it isn't wrong for someone to work hard, get into a good school, and do well within the confines of the law. But I think a picture that's been share a good deal on Facebook puts it best -- a young man holding a sign that says "I don't mind you being rich, I mind you buying my government". Part of what's driving this movement is a realization that, at some point, being wealthy became synonymous with holding a disproportionate amount of political power, and that that is unacceptable in a republic. As wealth continues to concentrate in fewer and fewer hands, the holders of that wealth use their money and influence to bring into force policies that allow even greater concentration of wealth and economic inequality. That, too, is unacceptable.
Again, I only speak for myself, but I hope what I have to say is helpful :)
http://www.youtube.com/watch?v=iGPWBkFL_h0
do you still believe that way? these are thieves not idiots making mistakes.
Skmdr, thank you. An intelligent point of view in a sea of morons. All correct. And Polk, the value of the American dollar is tied to perceptions in part. If US banks go under, the value of the US dollar declines rapidly. I am aware that inflation will occur if we start printing a load of bills, but the prospect of failing banks hurts the US dollar worse.
Well we can blame that on fiat money now can't we? Make no mistake not all banks would have went under.
Agreed. But, Ive got to say I think the Fiat merger was a great thing. And while i know not all US banks would go under, the fewer that do, the better for the state of the economy. While everyone wants to kick and scream about them, the bail outs were the best thing that could have happened, unless of course people like anarchy.
You are missing the point though, we are all paying for this while they are all still filthy rich, they should be contributing to fixing this mess. It is disgusting that the hard working people of America are stepping stones for the 1%. I love capitalism BUT.... the government should be for the people, not corporations! The 1% hate socialism until it works in their favor, that bailout was socialism at it's finest!
Polk, agree to disagree. The bailout did help hundreds of executives, but, far more importantly, it helped tens of thousands of low level employees. More importantly it helped secure thousands of loans that were made to middle class individuals. And it helped to save millions of other jobs. And those !% that you think got off scott-free are, in many cases being tracked down in a witch-hunt type effort.
I understand your response but do you not agree that the government ended up profiting from the transaction while still getting tax revenue from the folks that kept jobs? Let's not get defensive I am making an attempt to understand you which is more than most that are not part of your effort.
http://www.youtube.com/watch?v=iGPWBkFL_h0
this video is chilling in that it seems that this was done on purpose to collapse the economy
Smkdr, I know I this might make me seem idiotic, but was this post directed at me? I wanted to know before i responded.
Not sure which post you are referring to but it was not, everything I wrote was for whomever felt like responding.
How exactly would not bailing out the banks devalue the dollar? Printing money to bail out banks devalue the dollar!
Here's the truth of it. The American Economy is going to collapse. It's actually a guarantee. It's a fundamental function of the system that eventually it will collapse. That's how the FED system is designed. It can't not collapse. The only question is when.
So all of this dancing about and measures taken and "It's a good thing that" is going to be for naught because, eventually, the system will come crashing down on its own accord, with no help from anyone.
You can't have a debt based economy and expect it to last. It's time to face it, America is dead. We're currently rebuilding something new.
The government should have nationalized the banks. Collapse would have been avoided, funds seized, and prosecutions and jail terms would have been handed out instead of bonuses.
But since the banks own the government (Secretary of the Treasury Henry Paulson, CEO of Goldman Sachs, net worth around $700 million), there was no chance of that happening.