Very much so, The failure of the banks in the past 2 years was being compared to the great depression, instead of subsequent bank collapses. The problem with the analogy is that back in the 30s, there was no FDIC, FHSLA or even the Credit Union equivalient, and there were also no federal regulations of reserve deposits. So the hysteria that was used to push TARP was based on flawed analogies, and thus the bailout was flawed.
what i meant was, is the comparison fair? the sheer size of losses recently dwarfs the losses in the 80s, yes?
Hmmm, now what could that mean given the theme of this article. Well, if I was a thinking person, I would look to Kyoto and Copenhagen. In other words, subverting the laws of the land to those of the laws of the UN. It is no secret that Kerry campaigned on it in 04 as did Obama in 08.
cool, was just checking. my experience with people that use the term offer a fundamentally different definition of the term, so i wasn't sure.
The root cause of the issue that is referenced is the recession. You are talking about a component, I just expaned it to generalize about the overall market. And you best check the constitution. The president has no purse strings, Congress does, and we know who was in charge of them when TARP was created.
well, this site states that 91 republicans voted in favour of 1424. not a vast majority or anything, but still enough imo to claim it was more than just democrats controlling the purse strings. not to mention there was no opposition/objections from bush; surely the president has to take responsibility for legislation he signs??
http://clerk.house.gov/evs/2008/roll681.xml
As you said, you were not really around in the 80s, so I can see your misconception about this. But indeed, the banking side was not that weak (the brokerage side was very weak) this time around, and the 80s saw a massive upheavel in the basic structure of banking due to failures. Without Tarp, we would have seen a similar shakeout this time, but I do not recall the world ending in the 80s due to that failure period.
the only resource ive been able to find is wiki, but id prefer not to use it with regards to the comparison. could you provide a brief comparison between the amount of dollars lost and the number of banks that collapsed? because my understanding is that both numbers are stubstantially bigger recently than in the 80s. and yes, by "banks" i include brokerage houses and insurance companies caught up in the risk (that some people dont believe existed).
The critical word here is "required". Since there is no proof it was required by BOA or CITI, it is all an exercise in linguistics. They paid it back quickly, because they did not require it. It helped them to be sure, but some banks still failed (too far gone) and others just pocketed the money (as evidenced by the rebound of the profits so quickly - has GM and Chrysler made billions since their bailout?). The refutation is not in saying they have not paid back the money, but in that they needed the money to begin with. They clearly did not. BOA was buying companies right, left and center up to the bailout! Companies going belly up are not buying other companies during their swan song.
oh for sure, several institutions did not require funds, and it was effectively forced down their throat. im certainly not defending that.
Ignoring your condescending rhetoric, I will state I am an Economist. To be clearer I am an monetarist (think of Walter E. Williams).
well i have to ask (and please don't be offended) but are you are REAL economist, or just an "economist" of the austrian school dressed in monetarist clothing? i mean, williams has links to mises on his site? really?
As for your classification of Paulson and Bernanke, I would suggest you read up more on them. You will find they are not the free marketers you trumpet them to be. I am not suggesting they are socialilsts or worse (there are more than 2 states of thought in this area), but they are hardly what one would call a freemarketer. Nor do I agree with them. If you are looking for a good Fed Chairman, think Volcker.
well, ignoring the fact that a chairman of the federal reserve is inherently and inevitably a market intervener, i have read nothing from bernanke that would suggest he was anything but a monetarist in the long shadow of friedman. indeed most of his work on the depression echoed friedman and shwartz fairly closely. he certainly favours leaving markets alone to do their thing, except in exceptional circumstances.
im not sure how paulson could be described any other way though, being a rabid free marketeer is how he made his mark (well until the crisis obviously). i mean, im sure you saw his haunted visage when explaining the necessities of effective nationalisation during the peak of the crisis? not a happy chappy. gutted even. until the crisis i am unaware of paulson's economic opinions being anything but unwaveringly free-market orientated. if you have some, id love to read it.
Because you cannot connect the dots. And they are not many to connect. You only have to ask yourself where the money for BOTH comes from. And then ask what the hell the government is doing on either in the first place. The answer is pure politics. That is why. You can deny it, but that does not make your denial valid. And the proof is in the pudding. You only have to look at where the stimulus money went to AND what conditions - pre and post facto - were placed on the TARP and porkulus money. Whether the conditions are put on pre or post payoff does not matter. They are both there in the end.
you're right, i do deny this (re TARP that is). all i saw in TARP was a bunch of scared politicians doing what most economists said they should be doing, to prevent escalation of an already serious situation. before TARP, before most elected government officials even became aware of seriousness, bernanke and paulson were in the backrooms hammering out deals to prevent implosion. i see TARP as the political manifestation of such initial dealings, and call me hopelessly naive but i do not consider the fed's responses, opinions and suggestions during the crisis to be political. i certainly don't see paulson taking his bitter medicine (over and over) to be political either- i would argue "politics" would have engendered him ignoring the crisis entirely, in favour of his long-standing faith in minimal government and free markets, as well as his level of detest for moral hazard and government intervention. of course, ANY legislation will end up being political, that being the nature of the beast.
And yes, i am definitely alleging that funds from TARP were spent on assets that were not toxic. In case you have not heard, the current administration is very mad at the banks for not doing exactly that - re-issuing bad loans to cover bad loans. instead the banks took that money and put it into safe investments - T-Bills. Big shock. The money to cover the toxic assets - where a connection can be made - went to Fannie and Freddie - both of which were already government owned, operated and mismanaged.
oh yeah, don't get me started on how the banks behaved post bailout. all i can really respond with here is to echo clonmac from the previous page, in pointing out that the majority of subprime defaults, which started the entire ball rolling, came from institutions not subject to the regulations of the CRA. im not denying responsibility on behalf of government by any stretch of the imagination, i happen to subscribe to the 'perfect storm' analogy, but a big part of that perfect storm was unrelated to the community reinvestment act.
