3 ms·

Let them fail full stop. If there's any lesson from 2008, it's this. Do not bail out banks and their execs.

by memish 4y ago

Loughla 4y ago
I think where we go wrong is in bailing them out, but not nationalizing them afterward. If we're going to make the losses public, then the gains afterwards become public as well. The executives, though, should be prosecuted, or at the very least removed from being executives and board members at any financial or ancillary institution ever again. But for real. Why not nationalize the failed institutions? It's not as if the incentives can get more perverse than they are now, unless I'm missing something.
- triceratops 4y ago
  Because that's communism. (Not even /s, that's the actual argument people make)
  - soperj 4y ago
    Same with fire depts, police, medicare, sewage, roads?
    - triceratops 4y ago
      Don't shoot the messenger. I didn't say I agreed with the argument. For example, anyone who is in favor of "smaller government" should support of the "Defund the police" movement. They do not. That should tell you something about the state of critical thinking. Public healthcare is "communism" but police and the armed forces are somehow not. I've made literally the same argument to someone on here a while back. Here it is: https://news.ycombinator.com/item?id=25503815 https://news.ycombinator.com/item?id=25503815
      - soperj 4y ago
        Right, forgot about the armed forces :)
  - kiksy 4y ago
    RBS was nationalised in the UK in 2008. It's still doing fine.
    - whimsicalism 4y ago
      Not sure about the GP, but the case that you want to avoid is capital being allocated for political reasons rather than towards productive enterprise.
    - triceratops 4y ago
      I didn't say I agreed. I'm just telling you why it didn't happen. FWIW the UK and Canada (and maybe other Commonwealth countries) have had successful examples of public-owned companies. The US has no such tradition and is, therefore, culturally resistant to the idea.
- memish 4y ago
  Then you're locking failed institutions into an even bigger monopoly. The problem is that they were already "too big to fail" as a result of regulatory capture, revolving doors between government and big banks and bailouts. Just let them fail.
- Barrin92 4y ago
  The American government, and several across the pond, literally did (partially) nationalize major banks and the treasury sold those shares back after the crisis, leaving the taxpayer with a pretty decent return. TARP earned a net benefit of 15 billion.
sixhobbits 4y ago
I thought the lesson was to invest in finance industry because if you win you win and if you lose you'll be bailed out using tax funds from people who chose not to play
- nemo44x 4y ago
  Sounds like the same thinking for overpaying for college.
krono 4y ago
Reminds me of the Satoshi's BTC genesis block message: EThe Times 03/Jan/2009 Chancellor on brink of second bailout for banks Block Explorer: https://explorer.btc.com/btc/block/0 https://explorer.btc.com/btc/block/0 Referenced The Times article: https://archive.ph/FqRF3 https://archive.ph/FqRF3 Bonus article with some interesting takes: https://www.coindesk.com/markets/2021/01/24/crypto-long-short-no-bitcoin-was-not-a-response-to-the-financial-crisis/ https://www.coindesk.com/markets/2021/01/24/crypto-long-shor...

Let them fail full stop. If there's any lesson from 2008, it's this. Do not bail out banks and their execs.

by memish 4y ago

Let them fail full stop. If there's any lesson from 2008, it's this. Do not bail out banks and their execs.

I think where we go wrong is in bailing them out, but not nationalizing them afterward. If we're going to make the losses public, then the gains afterwards become public as well. The executives, though, should be prosecuted, or at the very least removed from being executives and board members at any financial or ancillary institution ever again. But for real. Why not nationalize the failed institutions? It's not as if the incentives can get more perverse than they are now, unless I'm missing something.

triceratops 4y ago
Because that's communism. (Not even /s, that's the actual argument people make)
- soperj 4y ago
  Same with fire depts, police, medicare, sewage, roads?
  - triceratops 4y ago
    Don't shoot the messenger. I didn't say I agreed with the argument. For example, anyone who is in favor of "smaller government" should support of the "Defund the police" movement. They do not. That should tell you something about the state of critical thinking. Public healthcare is "communism" but police and the armed forces are somehow not. I've made literally the same argument to someone on here a while back. Here it is: https://news.ycombinator.com/item?id=25503815 https://news.ycombinator.com/item?id=25503815
    - soperj 4y ago
      Right, forgot about the armed forces :)
- kiksy 4y ago
  RBS was nationalised in the UK in 2008. It's still doing fine.
  - whimsicalism 4y ago
    Not sure about the GP, but the case that you want to avoid is capital being allocated for political reasons rather than towards productive enterprise.
  - triceratops 4y ago
    I didn't say I agreed. I'm just telling you why it didn't happen. FWIW the UK and Canada (and maybe other Commonwealth countries) have had successful examples of public-owned companies. The US has no such tradition and is, therefore, culturally resistant to the idea.
memish 4y ago
Then you're locking failed institutions into an even bigger monopoly. The problem is that they were already "too big to fail" as a result of regulatory capture, revolving doors between government and big banks and bailouts. Just let them fail.
Barrin92 4y ago
The American government, and several across the pond, literally did (partially) nationalize major banks and the treasury sold those shares back after the crisis, leaving the taxpayer with a pretty decent return. TARP earned a net benefit of 15 billion.

sixhobbits 4y ago

I thought the lesson was to invest in finance industry because if you win you win and if you lose you'll be bailed out using tax funds from people who chose not to play

nemo44x 4y ago
Sounds like the same thinking for overpaying for college.

krono 4y ago

Reminds me of the Satoshi's BTC genesis block message: EThe Times 03/Jan/2009 Chancellor on brink of second bailout for banks Block Explorer: https://explorer.btc.com/btc/block/0 https://explorer.btc.com/btc/block/0 Referenced The Times article: https://archive.ph/FqRF3 https://archive.ph/FqRF3 Bonus article with some interesting takes: https://www.coindesk.com/markets/2021/01/24/crypto-long-short-no-bitcoin-was-not-a-response-to-the-financial-crisis/ https://www.coindesk.com/markets/2021/01/24/crypto-long-shor...