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.
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.
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)
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:
econfaculty.gmu.edu/wew/articles … evancy.htm
He also hosts a pamphlet on the Great Depression: 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.