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Are we really going to pretend that financial institutions are “private” enterprises? I recall the taxpayer being forced to bail them out for their incompetence

Are we really going to pretend that financial institutions are “private” enterprises? I recall the taxpayer being forced to bail them out for their incompetence. They are effectively government institutions and should be regulated as such.

_red 8y ago
Its more than that, banking is a legally granted monopoly license (ie. Federal Reserve). So they are enjoying all the perks of being government backed (protected monopoly + full bailout privileges), yet must endure none of the restrictions of a government agency. Best of both worlds.
- mruts 8y ago
  Banks operate under a ton of restrictions. Such as Dodd-Frank. It's pretty ironic that the solution for being "too big to fail" was to make the banks even bigger while also placing restrictions of many types of trading. What should have been done is just remove the FDIC insurance and let banks do whatever the fuck they want. The only way to learn that risk management is important is if you see some of your competitors as road kill on the side of the road.
ceejayoz 8y ago
If you're going to abuse the definition of public vs. private that much, receiving a child tax credit makes me a publicly owned entity, which means I can't tell my kids not to be rude to their mother. TARP wound up making a small profit in the end, incidentally.
briandear 8y ago
Not to get off topic here, but banks were bailed out because they made subprime housing loans that went bad, however it was the government that compelled those loans in the first place. By doing what the government demanded (increasing home loans to people who didn’t have the proper credit,) the banks crashed. Government policy and housing “activists” created the housing collapse. https://fee.org/articles/how-the-federal-government-created-the-subprime-mortgage-crisis/ https://fee.org/articles/how-the-federal-government-created-...

_red 8y ago

Its more than that, banking is a legally granted monopoly license (ie. Federal Reserve). So they are enjoying all the perks of being government backed (protected monopoly + full bailout privileges), yet must endure none of the restrictions of a government agency. Best of both worlds.

mruts 8y ago
Banks operate under a ton of restrictions. Such as Dodd-Frank. It's pretty ironic that the solution for being "too big to fail" was to make the banks even bigger while also placing restrictions of many types of trading. What should have been done is just remove the FDIC insurance and let banks do whatever the fuck they want. The only way to learn that risk management is important is if you see some of your competitors as road kill on the side of the road.

ceejayoz 8y ago

If you're going to abuse the definition of public vs. private that much, receiving a child tax credit makes me a publicly owned entity, which means I can't tell my kids not to be rude to their mother. TARP wound up making a small profit in the end, incidentally.

briandear 8y ago

Not to get off topic here, but banks were bailed out because they made subprime housing loans that went bad, however it was the government that compelled those loans in the first place. By doing what the government demanded (increasing home loans to people who didn’t have the proper credit,) the banks crashed. Government policy and housing “activists” created the housing collapse. https://fee.org/articles/how-the-federal-government-created-the-subprime-mortgage-crisis/ https://fee.org/articles/how-the-federal-government-created-...