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> Bankruptcy is an option. Yeah, I thought the same thing in 2008, then the haunting words "too big to fail" were used by both Obama and McCain, so it didn't c

> Bankruptcy is an option. Yeah, I thought the same thing in 2008, then the haunting words "too big to fail" were used by both Obama and McCain, so it didn't care who won the presidential election, the banksters would still get a bail out. Fast forward to today, and it still doesn't matter whether a Dem or Rep sits in the oval office, the banksters will always have safety net.

PaulDavisThe1st 5y ago
The problem is of course that we're all so caught up in the bankster's nets that their failure is a problem for all of us. When Obama and McCain said "too big too fail" they weren't so much saying "these guys are my friends and I don't want them to fail" (though this may well have been true). They were saying "the chaos that will ensue if these institutions fail will be too deep and wide for us to deal with". That was, of course, the point of trying to do something to make them NOT too big too fail, an effort that appears to have really gone nowhere.
- webdoodle 5y ago
  > is a problem for all of us. Not for those of us that don't invest our money in banks/stock markets, and don't take out loans. Private businesses meeting the above criteria would have boomed under those conditions, as there competitors were wiped out. The world is addicted to banks, and it really needs to treat the source, not the symptoms.
  - PaulDavisThe1st 5y ago
    If you participate in the economic system at all, the failure of over-sized banking institutions will fuck you up whether you have an account or loan with them or not. Yes, we do indeed to need to deal with the banking system, but until that's done, if large elements within it fail, the pain is going to be felt by a lot of the little people much more than the bankers.
    - nix0n 5y ago
      > If you participate in the economic system at all, the failure of over-sized banking institutions will fuck you up whether you have an account or loan with them or not. The stock market crashed despite the bailout. People lost their jobs and houses despite the bailout. What would have been worse if the banks had not been bailed out?
      - PaulDavisThe1st 5y ago
        More people would have lost their jobs and houses, and whatever recovery was experienced would likely have taken longer and not been as "complete" (not that it was complete anyway, and it took far too long because of spending wimps in Congress). More businesses would have failed, and not restarted.
        treeman79 5y ago
        If I could place wagers and know that someone else would cover my loses… well I might be inclined to make a lot of risky wagers. If I make money, great, if I lose, it’s someone else’s problem. When government provides too cozy a safety net it encourages risky lending. Federal flood insurance is another fun topic related to this.
        PaulDavisThe1st 5y ago
        I'm not arguing the government support for the banking industry is a good thing or the right thing (though there are some arguments to be made in support of it). I am saying that pulling that support during a banking crisis will generally be a disaster for the rest of us. We need to change the support for the banking industry but in a manner that doesn't screw the rest of us over with side effects.
        treeman79 5y ago
        Maybe so. Not repeating the same mistakes again is more of where I was going.
  - cyanydeez 5y ago
    Unless you can eat those assets, build cars, computers or houses, all you have is just an alt economy that's indistinguishable from the dollar, except it has a different name.
  - TomSwirly 5y ago
    > Not for those of us that don't invest our money in banks/stock markets, and don't take out loans. So you are paid in cash, by a company that also does all its business in cash?
  - PeterisP 5y ago
    A systemic bank collapsing means that the companies who use them for paying their employees and suppliers, well, don't. This causes a chain reaction as the companies with a solid business model aren't able to execute it because they can't pay for their inputs (or their B2B customer can't pay for their deliveries) as their liquid cash is frozen until insolvency may return part of it, and they have to suspend operations, which is yet another hit on people (not) receiving salaries and on all the other related companies. Protection of systemic banks is not about investors and loans, it's about the liquidity/working capital of companies and the people's salaries.
  - solveit 5y ago
    > Not for those of us that don't invest our money in banks/stock markets, and don't take out loans. Private businesses meeting the above criteria would have boomed under those conditions, as there competitors were wiped out. These two sentences contradict each other. You see, the competitors that get wiped out have employees who would lose their jobs regardless of how their money was stored.
  - jjk166 5y ago
    Let's say I'm a small mom and pop grocery store selling produce. I've been very cautious with my money and haven't taken out any loans, so I'm safe. But all the farmers whose produce I'm selling did because that's the only way to effectively run a farm. Now I have no inventory to sell. Am I still going to thrive? The world is addicted to banks, and more specifically lending because that's how you convert future, uncertain payouts into steady, predictable capital that can be used to buy inventory, pay employees, make repairs, etc. To kick our bank addiction would be ruinous.
apexalpha 5y ago
It's possible to bail out a bank while letting it go bankrupt. In Europe it became standard practice: you bail out the bank, but shareholders and bond holders lose their assets. It becomes nationalized instead.
- Rury 5y ago
  Is that entirely correctly? Don't secured bond holders get their assets back (or at least whatever the bailout ends up being)? Something akin to FDIC?
- Cerium 5y ago
  That is how it should work. Why should the citizens pay for a bank and fail to acquire a bank?
  - PeterisP 5y ago
    IIRC the USA "too big to fail" bailouts were as loans which by now have all been repaid with appropriate interest, the citizens did not pay for a bank, they lent it some more money and got it back.
    - cudgy 5y ago
      You seriously believe that? Appropriate interest? Try 0% interest.
      - chrononaut 5y ago
        https://projects.propublica.org/bailout/ https://projects.propublica.org/bailout/ > We're tracking where taxpayer money has gone in the ongoing bailout of the financial system. Our database accounts for both the broader $700 billion bill and the separate bailout of Fannie Mae and Freddie Mac. > Altogether, accounting for both the TARP and the Fannie and Freddie bailout, $635B has gone out the door. Money has been coming back in two ways: $390B of principal has been repaid, and the Treasury has collected revenue from its investments of $353B. > In total, the government has realized a $109B profit as of August 30, 2021. I'm sure there are a lot of other hidden costs with the bailouts that aren't accounted for here, but it seems the companies that were specifically loaned money generally paid back more than what was given? If not, what else is missing here?
penneyd 5y ago
It does matter, and to think otherwise is willful ignorance.
areyousure 5y ago
> in 2008, then the haunting words "too big to fail" were used by both Obama and McCain I don't believe those words were spoken by Obama in 2008, except possibly to criticize the idea.

PaulDavisThe1st 5y ago

The problem is of course that we're all so caught up in the bankster's nets that their failure is a problem for all of us. When Obama and McCain said "too big too fail" they weren't so much saying "these guys are my friends and I don't want them to fail" (though this may well have been true). They were saying "the chaos that will ensue if these institutions fail will be too deep and wide for us to deal with". That was, of course, the point of trying to do something to make them NOT too big too fail, an effort that appears to have really gone nowhere.

webdoodle 5y ago
> is a problem for all of us. Not for those of us that don't invest our money in banks/stock markets, and don't take out loans. Private businesses meeting the above criteria would have boomed under those conditions, as there competitors were wiped out. The world is addicted to banks, and it really needs to treat the source, not the symptoms.
- PaulDavisThe1st 5y ago
  If you participate in the economic system at all, the failure of over-sized banking institutions will fuck you up whether you have an account or loan with them or not. Yes, we do indeed to need to deal with the banking system, but until that's done, if large elements within it fail, the pain is going to be felt by a lot of the little people much more than the bankers.
  - nix0n 5y ago
    > If you participate in the economic system at all, the failure of over-sized banking institutions will fuck you up whether you have an account or loan with them or not. The stock market crashed despite the bailout. People lost their jobs and houses despite the bailout. What would have been worse if the banks had not been bailed out?
    - PaulDavisThe1st 5y ago
      More people would have lost their jobs and houses, and whatever recovery was experienced would likely have taken longer and not been as "complete" (not that it was complete anyway, and it took far too long because of spending wimps in Congress). More businesses would have failed, and not restarted.
      - treeman79 5y ago
        If I could place wagers and know that someone else would cover my loses… well I might be inclined to make a lot of risky wagers. If I make money, great, if I lose, it’s someone else’s problem. When government provides too cozy a safety net it encourages risky lending. Federal flood insurance is another fun topic related to this.
        PaulDavisThe1st 5y ago
        I'm not arguing the government support for the banking industry is a good thing or the right thing (though there are some arguments to be made in support of it). I am saying that pulling that support during a banking crisis will generally be a disaster for the rest of us. We need to change the support for the banking industry but in a manner that doesn't screw the rest of us over with side effects.
        treeman79 5y ago
        Maybe so. Not repeating the same mistakes again is more of where I was going.
- cyanydeez 5y ago
  Unless you can eat those assets, build cars, computers or houses, all you have is just an alt economy that's indistinguishable from the dollar, except it has a different name.
- TomSwirly 5y ago
  > Not for those of us that don't invest our money in banks/stock markets, and don't take out loans. So you are paid in cash, by a company that also does all its business in cash?
- PeterisP 5y ago
  A systemic bank collapsing means that the companies who use them for paying their employees and suppliers, well, don't. This causes a chain reaction as the companies with a solid business model aren't able to execute it because they can't pay for their inputs (or their B2B customer can't pay for their deliveries) as their liquid cash is frozen until insolvency may return part of it, and they have to suspend operations, which is yet another hit on people (not) receiving salaries and on all the other related companies. Protection of systemic banks is not about investors and loans, it's about the liquidity/working capital of companies and the people's salaries.
- solveit 5y ago
  > Not for those of us that don't invest our money in banks/stock markets, and don't take out loans. Private businesses meeting the above criteria would have boomed under those conditions, as there competitors were wiped out. These two sentences contradict each other. You see, the competitors that get wiped out have employees who would lose their jobs regardless of how their money was stored.
- jjk166 5y ago
  Let's say I'm a small mom and pop grocery store selling produce. I've been very cautious with my money and haven't taken out any loans, so I'm safe. But all the farmers whose produce I'm selling did because that's the only way to effectively run a farm. Now I have no inventory to sell. Am I still going to thrive? The world is addicted to banks, and more specifically lending because that's how you convert future, uncertain payouts into steady, predictable capital that can be used to buy inventory, pay employees, make repairs, etc. To kick our bank addiction would be ruinous.

apexalpha 5y ago

It's possible to bail out a bank while letting it go bankrupt. In Europe it became standard practice: you bail out the bank, but shareholders and bond holders lose their assets. It becomes nationalized instead.

Rury 5y ago
Is that entirely correctly? Don't secured bond holders get their assets back (or at least whatever the bailout ends up being)? Something akin to FDIC?
Cerium 5y ago
That is how it should work. Why should the citizens pay for a bank and fail to acquire a bank?
- PeterisP 5y ago
  IIRC the USA "too big to fail" bailouts were as loans which by now have all been repaid with appropriate interest, the citizens did not pay for a bank, they lent it some more money and got it back.
  - cudgy 5y ago
    You seriously believe that? Appropriate interest? Try 0% interest.
    - chrononaut 5y ago
      https://projects.propublica.org/bailout/ https://projects.propublica.org/bailout/ > We're tracking where taxpayer money has gone in the ongoing bailout of the financial system. Our database accounts for both the broader $700 billion bill and the separate bailout of Fannie Mae and Freddie Mac. > Altogether, accounting for both the TARP and the Fannie and Freddie bailout, $635B has gone out the door. Money has been coming back in two ways: $390B of principal has been repaid, and the Treasury has collected revenue from its investments of $353B. > In total, the government has realized a $109B profit as of August 30, 2021. I'm sure there are a lot of other hidden costs with the bailouts that aren't accounted for here, but it seems the companies that were specifically loaned money generally paid back more than what was given? If not, what else is missing here?

penneyd 5y ago

It does matter, and to think otherwise is willful ignorance.

areyousure 5y ago

> in 2008, then the haunting words "too big to fail" were used by both Obama and McCain I don't believe those words were spoken by Obama in 2008, except possibly to criticize the idea.