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That's very nice and good. So if I struggle to pay my mortgage, why am I evicted instead of bailed out? It's highly unlikely that I be unemployed for the rest o

That's very nice and good. So if I struggle to pay my mortgage, why am I evicted instead of bailed out? It's highly unlikely that I be unemployed for the rest of my life, so I would surely be able to pay back any bailout, with interest to spare. Why do banks struggle and get bailed out, but people struggle and don't? Or looking at it from another point of view: the money spent on bailouts wouldn't be stored under a mattress if it were not spent that way, therefore you cannot compare $109B with $0. You have to compare it, for example, with the money lost from the moral hazard of rewarding the irresponsible behaviour which led to the most destructive recession in 75 years, or to the effect the money would have had it been spent helping the millions of people that lost their jobs or had their homes foreclosed on, etc.

Dylan16807 5y ago
The government could have done both, so I don't think we should frame it as competing loans.
arcticbull 5y ago
These are all separate responsibilities of different groups. The Fed's charter is to maintain a low, predictable rate of inflation over the medium term and to maximize employment. You (in aggregate) won't have a job if all the employers go bankrupt due to direct investments and contagion. This will directly impact (in aggregate) your ability to make your mortgage payments. Secondarily, regulation of the financial sector to ensure this doesn't happen again isn't JPow's job, it's the job of Congress. Bailing out the institutions does not preclude further regulation to prevent the situation from happening again. And it certainly doesn't preclude creating a meaningful social safety net.
- kcatskcolbdi 5y ago
  The Federal Reserve is absolutely tasked with regulating the banks[1]. Congress should not be in the business of preventing banks from imploding in on themselves via regulation. Congressional regulations should insulate consumers from predatory financial institution practices. FDIC insurance exists to protect consumers in the event their banks behave irrationally. There should be no backstop for the banks themselves. Even if they wanted to Congressional regulations couldn't keep pace with the speed at which financial instruments of institutional suicide are forged. 1 https://www.federalreserve.gov/supervisionreg/reglisting.htm https://www.federalreserve.gov/supervisionreg/reglisting.htm
beebmam 5y ago
Were you evicted in the 2008 crisis?
beeboop 5y ago
Why do people go to jail and lose all ability to make income, but corporations don't? Corporations should get virtual jail time where they're not allowed to operate for a set period of time and have all their rights stripped away.
- yupper32 5y ago
  You don't go to jail if you can't repay your mortgage.
  - beeboop 5y ago
    I meant more in the context of corps only getting fines for illegal activities that actual people would go to jail for
- andrepd 5y ago
  Honestly, I'd settle for jail time for the actual persons making the illegal decisions, rather than virtual jail time for corporations. You know... personal accountability. Say a factory is poisoning the riverwater, what is more likely to disssuade such actions: penalties to the company (taken in stride as the cost of doing business), or actual jail time and forfeit of assets to the person making the decision and reaping the profits from it?
  - beeboop 5y ago
    The problem is that a company can be a revolving door of people taking the fall for crimes. The better dissuading action is to force the company to shutter operations for a set period of time. It's only fair that such a catastrophic punishment can happen to individuals that it can also happen to businesses that are generally much, much more harmful.
- capitalsigma 5y ago
  What happens to the employees of that company?
MattGaiser 5y ago
> It's highly unlikely that I be unemployed for the rest of my life Unemployed? No. Earn what you did before? Anecdotal, but my parents know a lot of people in their 50s that when laid off, never went anywhere close to their prior salaries. This was especially true for people who couldn't get their current job with their credentials. Plenty of senior people in places like factories and warehouses don't have degrees for example. Would they find work again if laid off?
Barrin92 5y ago
>why am I evicted instead of bailed out? probably because you, collectively speaking, kept electing people who didn't pass anti-eviction laws or strengthened tenant rights. Which most countries by the way did put in place during covid at the very least.
- not2b 5y ago
  Because you didn't owe enough money to tank the world economy if you went broke, mainly. Small debtors have no power, but huge debtors do.
  - throwawayboise 5y ago
    Yep. If you owe the bank $1,000 that's your problem. If you owe the bank $100M that's the bank's problem.
  - arcticbull 5y ago
    I mean small debtors just get to declare bankruptcy and not pay, which is a pretty good power to have. Large debtors have broader obligations to the community.
  - wizzwizz4 5y ago
    So why don't debtors unionise?
somenewaccount1 5y ago
tim333 5y ago
It's kind of a political decision that varies from country as to what extent to bail people out. The UK for example has a "Support for Mortgage Interest" scheme with various terms and conditions. I'm not sure how the politics play out in the US.

Dylan16807 5y ago

The government could have done both, so I don't think we should frame it as competing loans.

arcticbull 5y ago

These are all separate responsibilities of different groups. The Fed's charter is to maintain a low, predictable rate of inflation over the medium term and to maximize employment. You (in aggregate) won't have a job if all the employers go bankrupt due to direct investments and contagion. This will directly impact (in aggregate) your ability to make your mortgage payments. Secondarily, regulation of the financial sector to ensure this doesn't happen again isn't JPow's job, it's the job of Congress. Bailing out the institutions does not preclude further regulation to prevent the situation from happening again. And it certainly doesn't preclude creating a meaningful social safety net.

kcatskcolbdi 5y ago
The Federal Reserve is absolutely tasked with regulating the banks[1]. Congress should not be in the business of preventing banks from imploding in on themselves via regulation. Congressional regulations should insulate consumers from predatory financial institution practices. FDIC insurance exists to protect consumers in the event their banks behave irrationally. There should be no backstop for the banks themselves. Even if they wanted to Congressional regulations couldn't keep pace with the speed at which financial instruments of institutional suicide are forged. 1 https://www.federalreserve.gov/supervisionreg/reglisting.htm https://www.federalreserve.gov/supervisionreg/reglisting.htm

beebmam 5y ago

Were you evicted in the 2008 crisis?

beeboop 5y ago

Why do people go to jail and lose all ability to make income, but corporations don't? Corporations should get virtual jail time where they're not allowed to operate for a set period of time and have all their rights stripped away.

yupper32 5y ago
You don't go to jail if you can't repay your mortgage.
- beeboop 5y ago
  I meant more in the context of corps only getting fines for illegal activities that actual people would go to jail for
andrepd 5y ago
Honestly, I'd settle for jail time for the actual persons making the illegal decisions, rather than virtual jail time for corporations. You know... personal accountability. Say a factory is poisoning the riverwater, what is more likely to disssuade such actions: penalties to the company (taken in stride as the cost of doing business), or actual jail time and forfeit of assets to the person making the decision and reaping the profits from it?
- beeboop 5y ago
  The problem is that a company can be a revolving door of people taking the fall for crimes. The better dissuading action is to force the company to shutter operations for a set period of time. It's only fair that such a catastrophic punishment can happen to individuals that it can also happen to businesses that are generally much, much more harmful.
capitalsigma 5y ago
What happens to the employees of that company?

MattGaiser 5y ago

> It's highly unlikely that I be unemployed for the rest of my life Unemployed? No. Earn what you did before? Anecdotal, but my parents know a lot of people in their 50s that when laid off, never went anywhere close to their prior salaries. This was especially true for people who couldn't get their current job with their credentials. Plenty of senior people in places like factories and warehouses don't have degrees for example. Would they find work again if laid off?

Barrin92 5y ago

>why am I evicted instead of bailed out? probably because you, collectively speaking, kept electing people who didn't pass anti-eviction laws or strengthened tenant rights. Which most countries by the way did put in place during covid at the very least.

not2b 5y ago
Because you didn't owe enough money to tank the world economy if you went broke, mainly. Small debtors have no power, but huge debtors do.
- throwawayboise 5y ago
  Yep. If you owe the bank $1,000 that's your problem. If you owe the bank $100M that's the bank's problem.
- arcticbull 5y ago
  I mean small debtors just get to declare bankruptcy and not pay, which is a pretty good power to have. Large debtors have broader obligations to the community.
- wizzwizz4 5y ago
  So why don't debtors unionise?

somenewaccount1 5y ago

tim333 5y ago

It's kind of a political decision that varies from country as to what extent to bail people out. The UK for example has a "Support for Mortgage Interest" scheme with various terms and conditions. I'm not sure how the politics play out in the US.