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> For one, I remember the Great Recession. They bailed out the banks and left the little guy/gal to ruin. What do you mean by the "little guy/gal"? It's true

> For one, I remember the Great Recession. They bailed out the banks and left the little guy/gal to ruin. What do you mean by the "little guy/gal"? It's true that the 2008 financial crisis only resulted in one banker going to jail, and he was not an executive. It's also true that the crisis only resulted in one bank getting indicted for criminal charges, and it was a small family-run bank in Chinatown with a stellar mortgage default rate (0.5%), and which reported activity that they discovered themselves, not a (metonymical) Wall Street conglomerate[0]. But if you're referring to people who own 401(k) accounts or receive pension funds, that's exactly who was bailed out. "Let the banks fail" is a common refrain, except what that literally translates to is letting people's retirement funds get wiped out due to impropriety that they weren't involved with at all. [0] They identified an employee who had falsified loan applications, and reported it to regulators after firing the employee. They were acquired of all charges brought to trial, and the prosecutors themselves later requested that the charges be dismissed, because they realized how ridiculous they were.

ianai 9y ago
They bailed out the financial entities with failing mortgage backed securities. They didn't bail out the people owing a mortgage. They could have made a mass restructuring program but instead left all those people to ruin. It's a point against the system in total and not just a 401k. You have to have a huge amount of trust in many people to say you won't touch your 401k money for 20+ years. If you can't trust the stock market how can you sign off on a 401k.
tacon 9y ago
>bailed out the banks In the 1930s, the bank stockholders were wiped out (equity set to zero), and they started over. In the 2008 crisis, bank stockholders were "bailed out". The value of their shares did not go to zero. The people who owned the bank before still owned it after. That is the difference between 401(k) accounts taking a 30% haircut and the bank stockholders retaining ownership of insolvent banks. When the media talks about "too big to fail", they mean "too big to have stockholders wiped out and have the government recapitalize them". Supposedly it sounds too much like socialism. It is really regulatory capture at its finest.

ianai 9y ago

They bailed out the financial entities with failing mortgage backed securities. They didn't bail out the people owing a mortgage. They could have made a mass restructuring program but instead left all those people to ruin. It's a point against the system in total and not just a 401k. You have to have a huge amount of trust in many people to say you won't touch your 401k money for 20+ years. If you can't trust the stock market how can you sign off on a 401k.

tacon 9y ago

>bailed out the banks In the 1930s, the bank stockholders were wiped out (equity set to zero), and they started over. In the 2008 crisis, bank stockholders were "bailed out". The value of their shares did not go to zero. The people who owned the bank before still owned it after. That is the difference between 401(k) accounts taking a 30% haircut and the bank stockholders retaining ownership of insolvent banks. When the media talks about "too big to fail", they mean "too big to have stockholders wiped out and have the government recapitalize them". Supposedly it sounds too much like socialism. It is really regulatory capture at its finest.