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Absolutely. People like Garry Tan, Sam Altman, Michael Seibel, Paul Graham, Mark Cuban, all pushed hard to keep their money, not caring if it's at taxpayer expe
by ah765 4y ago
Absolutely. People like Garry Tan, Sam Altman, Michael Seibel, Paul Graham, Mark Cuban, all pushed hard to keep their money, not caring if it's at taxpayer expense. Rich people tend to only care about helping others when it aligns with helping their own pockets.
This may have been the most prudent decision by the government, though it'll be hard to say what would've happened otherwise. But in the end, it sounds like the average person will still be negatively affected, by having small accounts under the $250k limit subsidize insurance for larger accounts.
- garry 4y ago[flagged]
- actuator 4y agoOh please, these are just excuses. If you want to reap the benefits of capitalism, you should also get punishment for not doing the job well. Getting a haircut above the insured amount was the sensible thing here.
- throwawaysleep 4y agoThe problem is that everyone now thinks of the haircut and flees any bank that its a fortress to make sure they don't face a haircut. I.e. you have a bank run on every bank under the largest 10.
- actuator 4y agoIf we are so fearful of this, and banks are so core to the economy, why not just have government owned banks then, since it seems like government has to subsidize mismanagement.
- adharmad 4y agoCapitalism without bankruptcy is a bit like Christianity without hell.
- moshegramovsky 4y agoAnd just look around. It's exactly this, everywhere.
- TMWNN 4y agoAaron Klein (former Treasury official, now with Brookings) agrees with you: >There are just under 5,000 banks in America ... the right answer for the number of banks to fail in a year is greater than zero. If you have no bank failing, then you probably have bigger problems in the economy. Look, the first time in American history you went a year without a bank failure was 2005. 2006 was the second year and the regulators told us at the time, that they'd won, that this was great regulation, see, no one was failing, the system couldn't be safer. Kablooey. <https://www.youtube.com/watch?v=rzQx4qmMcJI#t=4m5s https://www.youtube.com/watch?v=rzQx4qmMcJI#t=4m5s>
- tome 4y agoHey Garry, did YC advise its startups about prudent management of their treasury? How come so many of them had more than $250k in their checking accounts? Do you think you could have advised them better?
- ah765 4y agoSure, it's possible to justify that, and if I were in the Fed I might make the same decision. But how hard would you fight for this cause if it didn't benefit you personally? I want to hear those reasons from others, not from a bunch of rich people who would be personally profiting at the ordinary person's expense.
- nthngtshr 4y agoI don't understand why so many people have such a hard time justifying this. * If the bank collapses then many startups shut down. This is bad, but okay, maybe you think startups are net negative. In addition to that thousands of people will lose jobs — please explain how this is a good thing. Plus there's a potential for ripple effects from people not trusting banks anymore. * You say it's a bunch of rich people profiting. Who are these rich people you're talking about? Bank management? They went to zero overnight. Shareholders? zero. Who's left? Garry Tan? He has the same incentives as millions of Americans whose retirement savings are parked in VC funds. I want to say I'm one of those people who's not personally profiting from this, but I acknowledge that's not true — the economy is connected and stable economy is good for everyone and we should celebrate people who push for it.
- ah765 4y agoI actually personally profit from this as a software engineer working at a startup, but I don't agree with it because I recognize it's unfair. Let's say my house gets burglarized. Everyone agrees this is a bad thing and unfair to me. However, my insurance only covers $2k, and I lost $20k of stuff. Can I expect the government to "backstop" me? It's bad that the bank got shut down and depositors might have lost some of their money, but it's not fair to expect the government (and the average person indirectly) to reimburse for this, particularly when that's not how the FDIC policy is written. Garry Tan and all the people I listed have a lot of their value in YC and startups which have direct losses and direct benefit from getting reimbursed for losses. If it weren't for reimbursement, the effective valuation of the startups would go down, and they'd have to invest more money to keep them afloat. So he has much stronger incentives than ordinary Americans. The stable economy might be good for everyone, but I certainly will not celebrate rich people that push for their own wealth.
- tomato_123 4y agoThere was plenty of private capital ready to step in and buy these deposits, at a discount of course, making it possible to make payrolls. You and your ilk just didn't like that the equity holders would have to eat the loss. Stop pretending this is about anything else.
- hellold9302 4y ago> We fought hard to help founders who run businesses and have workers on payroll. No, you fought hard to save your investment fund. Stop trying to come off as altruistic. It’s fake and disingenuous.
- thuuuomas 4y agoYou’re speculating. You have no experience with fiscal or monetary policy. You’re a glorified salesman!
- tiffanyh 4y agoMark Cuban is a standup guy. Can speak from personal experience. Rest of your comment, I mostly agree with though.
- ah765 4y agoWouldn't mind hearing your story! But by default, I assume everyone, rich or poor, acts in a selfish manner. They'll help others only when it helps themselves, often by taking an insignificant financial hit for a substantial reputational bonus. Many rich people like the ones I listed try to act like their overall goal is to help others, but their actions seem to always align with furthering their own interests. If Mark Cuban did something that did substantial damage to his own overall value (financially or reputationally) in order to help someone unrelated, I'd be pleasantly surprised to hear it.
- tiffanyh 4y agoShort version: Mark realized a person needed help, even when those closest to that person didn’t realize. He went above & beyond to help that person, someone who he barely knew. Note: cutting a check is easy. What’s hard, is to give someone non-monetary help. Because it means you have to actually be involved if it’s non-monetary. This was that type of help he gave.
- ah765 4y agoI assume there's lots of private details you can't share, so I can't judge much. But fair, if that's true, it would be good. It's not like rich people need to care about what I think, but I just argue that people should avoid glorifying them and believing claims that they want to help the world, as I've seen too many times that they are only interested in helping themselves. And the things I've seen Mark Cuban push for on Twitter are often pretty awful.
- sebzim4500 4y agoShould they not push for a good policy just because it benefits them? I don't really get the criticism, unless you think they were hiding the fact they had skin in the game.