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I wouldn't say a whole lot was learned about money in the 20th Century given that the Secretary of the Treasury wound up on his knees begging the Speaker of the

I wouldn't say a whole lot was learned about money in the 20th Century given that the Secretary of the Treasury wound up on his knees begging the Speaker of the House to pass a bailout bill in 2008 to forestall an apocalyptic financial collapse. The jury is still out on this but it's possible all that was discovered was new ways to kick the can to an even bigger crisis down the road.

arcticbull 4y ago
> I wouldn't say a whole lot was learned about money in the 20th Century given that the Secretary of the Treasury wound up on his knees begging the Speaker of the House to pass a bailout bill in 2008 to forestall an apocalyptic financial collapse. (a) what does this have to do with monetary policy? the bailouts were run by Treasury and were strictly fiscal policy. this isn't really something we learned about money. (b) bailouts were loans not grants, and not only has the entire balance of the loans been repaid, the government netted a tidy profit ($109B) - and there's more left. [1] [1] https://projects.propublica.org/bailout/ https://projects.propublica.org/bailout/
- IdEntities 4y ago
  Right, so, what everyone "learned" is that you can leverage yourself to the gills, enjoy the fruits of debt-fueled asset appreciation on the way up, and when it all goes pear shaped the government will be able to step in and clean up the mess and get the whole cycle started again. The fiscal bailouts became necessary because the Fed had fired all of its monetary policy bullets and it had failed to arrest the collapse in confidence which was freezing credit markets. Like I said, the jury is still out. Maybe the next time will go just like 2008. Maybe there really will never be any price to pay for all this moral hazard that's being stuffed into the system.
- deathanatos 4y ago
  > [1] https://projects.propublica.org/bailout/ https://projects.propublica.org/bailout/ > In total, the government has realized a $109B profit as of May 13, 202. (sic) …how do such colossal, above the fold mistakes like this get made by big name publications. While I actually do believe you're correct here, I'm hard pressed to trust the data with that kind of lack of any sort of review.
- civilized 4y ago
  I just don't understand how there can be a profit. TARP was created to pay companies holding toxic mortgages and other worthless assets. How is it that the government pays for worthless assets and makes a profit? I think the financial masters of the universe have found some way to screw us and it's just hiding in some accounting tricks.
  - IdEntities 4y ago
    The real loss is in the lower rates at which the financial companies with a now-explicit government backstop are able to borrow money. That's a subsidy worth hundreds of billions of dollars per year which is never included in this sort of accounting.

arcticbull 4y ago

> I wouldn't say a whole lot was learned about money in the 20th Century given that the Secretary of the Treasury wound up on his knees begging the Speaker of the House to pass a bailout bill in 2008 to forestall an apocalyptic financial collapse. (a) what does this have to do with monetary policy? the bailouts were run by Treasury and were strictly fiscal policy. this isn't really something we learned about money. (b) bailouts were loans not grants, and not only has the entire balance of the loans been repaid, the government netted a tidy profit ($109B) - and there's more left. [1] [1] https://projects.propublica.org/bailout/ https://projects.propublica.org/bailout/

IdEntities 4y ago
Right, so, what everyone "learned" is that you can leverage yourself to the gills, enjoy the fruits of debt-fueled asset appreciation on the way up, and when it all goes pear shaped the government will be able to step in and clean up the mess and get the whole cycle started again. The fiscal bailouts became necessary because the Fed had fired all of its monetary policy bullets and it had failed to arrest the collapse in confidence which was freezing credit markets. Like I said, the jury is still out. Maybe the next time will go just like 2008. Maybe there really will never be any price to pay for all this moral hazard that's being stuffed into the system.
deathanatos 4y ago
> [1] https://projects.propublica.org/bailout/ https://projects.propublica.org/bailout/ > In total, the government has realized a $109B profit as of May 13, 202. (sic) …how do such colossal, above the fold mistakes like this get made by big name publications. While I actually do believe you're correct here, I'm hard pressed to trust the data with that kind of lack of any sort of review.
civilized 4y ago
I just don't understand how there can be a profit. TARP was created to pay companies holding toxic mortgages and other worthless assets. How is it that the government pays for worthless assets and makes a profit? I think the financial masters of the universe have found some way to screw us and it's just hiding in some accounting tricks.
- IdEntities 4y ago
  The real loss is in the lower rates at which the financial companies with a now-explicit government backstop are able to borrow money. That's a subsidy worth hundreds of billions of dollars per year which is never included in this sort of accounting.