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The banking cartel* gave itself more than half of the annual output of the world's largest economy. Bankers got and continue to get huge bonuses. Everyone else?

The banking cartel* gave itself more than half of the annual output of the world's largest economy. Bankers got and continue to get huge bonuses. Everyone else? Not so much. Heckuva job, guys. As the article asks, “Banks don’t give lines of credit to corporations for free. Why should all these government guarantees and liquidity facilities be for free?” The banks are simply too big as well. "Too big to fail" should mean "too big to exist". The process should be: get a bailout, get broken up. *"A cartel is a formal (explicit) agreement among competing firms. It is a formal organization of producers and manufacturers that agree to fix prices, marketing, and production."

dantheman 15y ago
The process should be, you fail - you fail, no bailouts.
- 1010011010 15y ago
  That would be even better. And if the units are small enough, it'll work. "Bailout then breakup" is a proposed mechanism for making those units small enough.
  - dantheman 15y ago
    There was no reason to bailout AIG, it merely was a way to pump cash into these banks. They should have been forced into bankruptcy and their assets sold of to more responsible banks.
kahirsch 15y ago
> The banking cartel gave itself more than half of the annual output of the world's largest economy. The word "gave" is not really correct. The 7.77 trillion dollar figure is the total amount of loan guarantees and credit authorizations. The highest amount ever loaned out at one time was just over 1 trillion dollars, and that's all been paid back.
- buff-a 15y ago
  This is Hacker News so use your imagination. Imagine if you were a start-up, and you could tell any investor, "I have a $1 billion guarantee from the Federal Reserve". Are you saying that that would have NO VALUE, even if you never used it? Now imagine every other startup you compete against has this guarantee and you don't. What are your chances now? The dollar in your pocket has no value when someone else can be loaned $1T at any moment.

dantheman 15y ago

The process should be, you fail - you fail, no bailouts.

1010011010 15y ago
That would be even better. And if the units are small enough, it'll work. "Bailout then breakup" is a proposed mechanism for making those units small enough.
- dantheman 15y ago
  There was no reason to bailout AIG, it merely was a way to pump cash into these banks. They should have been forced into bankruptcy and their assets sold of to more responsible banks.

kahirsch 15y ago

> The banking cartel gave itself more than half of the annual output of the world's largest economy. The word "gave" is not really correct. The 7.77 trillion dollar figure is the total amount of loan guarantees and credit authorizations. The highest amount ever loaned out at one time was just over 1 trillion dollars, and that's all been paid back.

buff-a 15y ago
This is Hacker News so use your imagination. Imagine if you were a start-up, and you could tell any investor, "I have a $1 billion guarantee from the Federal Reserve". Are you saying that that would have NO VALUE, even if you never used it? Now imagine every other startup you compete against has this guarantee and you don't. What are your chances now? The dollar in your pocket has no value when someone else can be loaned $1T at any moment.