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yes but ... - wasn't the instability for banks also partly caused by the sharp changes in interest rates, and perhaps for that reason should have been predicte

by abeppu 3y ago

yes but ... - wasn't the instability for banks also partly caused by the sharp changes in interest rates, and perhaps for that reason should have been predicted rather than just reacted to? - didn't we also learn that not only were these banks not required to participate in stress-testing, but that the recent stress tests hadn't exercised the kind of scenario that the Fed has been creating? - it seems like a substantial portion of inflation was triggered by excessively generous government programs like PPP which gave a bunch of money to businesses that weren't even impacted - reaction to inflation was kinda late, and Powell gave repeated claims that it was transitory So ... is cleaning up messes (or preventing the spread of messes) that government created a sign of competence in government?

ceejayoz 3y ago
Should the goal be "no bank ever fails", though?
- riffraff 3y ago
  But these banks didn't fail enough, >250k depositors should have been part of the bail in but they were not, and the banks were treated as systemically important even tho they were not held to the systemically important bank requirements before. FDIC/FED/Treasury perhaps did the best thing now, but it's still because of a previous mistake.
ModernMech 3y ago
> is cleaning up messes (or preventing the spread of messes) that government created a sign of competence in government? Without irony, yes. Ideally we would like governments not to create messes. But we can’t prevent that, and even if we could, messes will be created by other entities and other governments. Case in point, you mention the PPP loans, which were signed into law by a previous administration. Today with a new administration and a new situation, it doesn’t make sense to complain too hard about that. We should point it out the next time PPP-like loans are suggested, but we shouldn’t chide the current government for cleaning up a mess of its own making, because that’s really not what happened here. So yes, governments that are good at cleaning up messes are competent governments. Ideally they should also be good at not making messes, but the us government is an incredibly large entity, so messes are going to happen.
- abeppu 3y ago
  > Case in point, you mention the PPP loans, which were signed into law by a previous administration. The CARES act passed 96-0 in the Senate, and in the House was an overwhelming voice-vote. The large majority the house members and senators which voted for it are still in office, and Biden signed the PPP extension act of 2021. To pretend that this was a choice made by people no longer in government seems misleading. > Today with a new administration and a new situation, it doesn’t make sense to complain too hard about that. We should point it out the next time PPP-like loans are suggested ... Because a large majority were forgiven, these were mostly effectively grants, not loans. And after a bunch of people take your money, of course it's to their benefit if we all stop talking about that fact. But I don't think this is any more appropriate here than if a mugger tells you that their misdeeds are in the past and you should just move on and focus on other things despite the fact that they still have your wallet. > So yes, governments that are good at cleaning up messes are competent governments. Ideally they should also be good at not making messes, but the us government is an incredibly large entity, so messes are going to happen. I don't think this is more convincing than when a large tech service has a major outage and their ops team is competent in investigating and resolving the incident -- but that fact doesn't on its own mean that the organization is especially competent.
  - ModernMech 3y ago
    > To pretend that this was a choice made by people no longer in government seems misleading. I mean... it literally is though. You're quibbling around the margins about how there was a degree of holdover from one government to the next, which of course there always is. But it was in fact a new government, and you don't disagree. I chose the PPP example because it's recent, not to mislead. The HN guidelines implore you to be charitable in your interpretations.

by abeppu 3y ago

ceejayoz 3y ago

Should the goal be "no bank ever fails", though?

riffraff 3y ago
But these banks didn't fail enough, >250k depositors should have been part of the bail in but they were not, and the banks were treated as systemically important even tho they were not held to the systemically important bank requirements before. FDIC/FED/Treasury perhaps did the best thing now, but it's still because of a previous mistake.

ModernMech 3y ago

> is cleaning up messes (or preventing the spread of messes) that government created a sign of competence in government? Without irony, yes. Ideally we would like governments not to create messes. But we can’t prevent that, and even if we could, messes will be created by other entities and other governments. Case in point, you mention the PPP loans, which were signed into law by a previous administration. Today with a new administration and a new situation, it doesn’t make sense to complain too hard about that. We should point it out the next time PPP-like loans are suggested, but we shouldn’t chide the current government for cleaning up a mess of its own making, because that’s really not what happened here. So yes, governments that are good at cleaning up messes are competent governments. Ideally they should also be good at not making messes, but the us government is an incredibly large entity, so messes are going to happen.

abeppu 3y ago
> Case in point, you mention the PPP loans, which were signed into law by a previous administration. The CARES act passed 96-0 in the Senate, and in the House was an overwhelming voice-vote. The large majority the house members and senators which voted for it are still in office, and Biden signed the PPP extension act of 2021. To pretend that this was a choice made by people no longer in government seems misleading. > Today with a new administration and a new situation, it doesn’t make sense to complain too hard about that. We should point it out the next time PPP-like loans are suggested ... Because a large majority were forgiven, these were mostly effectively grants, not loans. And after a bunch of people take your money, of course it's to their benefit if we all stop talking about that fact. But I don't think this is any more appropriate here than if a mugger tells you that their misdeeds are in the past and you should just move on and focus on other things despite the fact that they still have your wallet. > So yes, governments that are good at cleaning up messes are competent governments. Ideally they should also be good at not making messes, but the us government is an incredibly large entity, so messes are going to happen. I don't think this is more convincing than when a large tech service has a major outage and their ops team is competent in investigating and resolving the incident -- but that fact doesn't on its own mean that the organization is especially competent.
- ModernMech 3y ago
  > To pretend that this was a choice made by people no longer in government seems misleading. I mean... it literally is though. You're quibbling around the margins about how there was a degree of holdover from one government to the next, which of course there always is. But it was in fact a new government, and you don't disagree. I chose the PPP example because it's recent, not to mislead. The HN guidelines implore you to be charitable in your interpretations.