17 ms·

You make a couple of great points, but you're obviously extremely misinformed about Iceland. Basically what happened in Iceland is due to an amount of stupidity

You make a couple of great points, but you're obviously extremely misinformed about Iceland. Basically what happened in Iceland is due to an amount of stupidity that greatly exceeds the amount we're used to in the rest of Europe and the USA (not implying that the people of Iceland are stupid, but they had incredibly incompetent people at the helm). They bailed out their banks as well, just wanted to make it look like they didn't. "[there are ideas] floating around that have already been demonstrated to work" is a bit of hyperbole and I'd love to see you get into the specifics. The sad truth, to me, is that we are responsible because we make our governments spend too much money.

okamiueru 14y ago
Iceland jailed bankers, and paid for the citizens' debt. I don't see why the US can't jail people responsible for the crisis, even though the banks are too big too fail. In other words, I don't see how banks are 'too big' to receive a new CEO and lose a few employees.
- megablast 14y ago
  There are too many people who were responsible, and most of them were just doing there jobs. Who would you pick as responsible, especially when laws aren't broken. It is too simplistic to run around decrying the fact that nobody was jailed.
  - RexRollman 14y ago
    Just doing their jobs? Who's just description says "fraud" on it?
    - damoncali 14y ago
      The credit crisis was not caused by fraud.
  - fnordfnordfnord 14y ago
    >>There are too many people who were responsible, That makes it more important to sort it out, not less. >>and most of them were just doing there jobs. That's never been a good excuse for anyone caught delivering a load of drugs. >>It is too simplistic to run around decrying the fact that nobody was jailed. No, not really. Jailing people is our answer to almost every problem. We imprison people even when it is obvious that imprisonment has a strong counter-productive effect. Yet, in one population where I'd argue that imprisonment would have a strong deterrent effect... nothing. It's not as though there is a lack of evidence of serious crime, either. On the contrary, criminality in finance is so glaringly obvious that people are tiring of pointing it out, while others simply work around it knowing that nothing will be done.
- gadders 14y ago
  What like Lehmans or Bear Sterns? Banks have lost thousands of employees.
- deleted 14y ago
  [deleted]
- damoncali 14y ago
  The vast majority of the people "responsible" were not doing anything wrong or illegal. Who is responsible? Anyone who: -Sold a house at an inflated price -Bought a house at an inflated price -Sold a mortgage to someone who could not afford it -Bought a mortgage that they could not afford -Sold MBS -Bought MBS -Used or provided leverage to buy MBS -Insured these transactions with derivatives or other instruments Who, precisely, would you like to arrest, and for what? This was not the result of fraud (although I'm sure there was some of that) but the result of a systematic setup for failure. Even if you cleaned up all of the fraud, it still would have happened.
  - moe 14y ago
    The problem is not that something illegal happened. The problem is that what happened wasn't illegal. Prosecution is boring and pointless. We should focus on limiting the damage that the next crisis can do. There's the real problem: Nothing happens in this regard. The beneficiaries of the current system have become powerful enough to deflect any external influence on their schemes. That is the question of our time: How can we break this regime before we find ourselves (or rather: our children) living in a dystopia. As of today the odds are not looking good.
    - damoncali 14y ago
      Those are systemic changes, though. Breaking up banks, reinstating Glass Steagall, that sort of thing. I don't think those solutions are out of reach. It will be tough, but it certainly seems doable. It is a shame that politicians are demagoguing with all this "they need to go to jail" talk, because it is a distraction from the actual problem. That is simply that when too much leverage is applied to the same bet and hedged in the same way by everyone, it will blow up catastrophically when things go bad. That has nothing to do with legality or fraud or any such thing, and everything to do with regulation. It was a political and intellectual failure, not a moral one.
      - moe 14y ago
        It is a shame that politicians are demagoguing with all this "they need to go to jail" talk Depending on how cynic you are you could believe this is exactly the message that $wall_street wants them to push. Everyone knows that nobody relevant is going to jail anyway, but it's a nice, superficial "debate" to keep the general public busy with... Nice in the sense that you can apparently drag it out near infinitely. Remember: Lehmann crashed 5 years ago. Yet when you look at the state of discussion in the mainstream media you'd think it happened just yesterday.
crdoconnor 14y ago
Sweden followed a more sensible course of action, though. They fully nationalized the banks, kicked out the top management, wrote off the bad loans and then re-privatized the banks a few years later. >The sad truth, to me, is that we are responsible because we make our governments spend too much money. Our governments do not "spend too much", the main economic problems we have are too much bad debt (leading to zombie banks), an excess of fraud in the financial sector and not enough economic activity as a result, resulting in high unemployment. A government can never spend too much money (it is created with a few strokes of a computer keyboard). They can only spend beyond the limits of the economy's capacity. Right now almost every western economy is operating way under capacity, which is obvious if you look at almost any metric from inflation to employment to inventory. The government spending more would actually help, although what we really need is for the banks to start writing off bad debts - which they don't want to do because then they would be insolvent.
- gadders 14y ago
  Government spending doesn't help. That's Keynesism which is widely discredited.
  - mercurial 14y ago
    My understanding is that it was widely discredited before the financial crisis, back when economists thought they actually understood economy and that economic crisis were a thing of the past. Then reality happened, and it seems that US government spending has kept the economy going to the dogs. On the other hand, looking around in Europe, I don't manage to find a single country where austerity measures appear to have produced anything than deeper recession.
    - gadders 14y ago
      The UK is hovering around the recession borderline, but I wouldn't say the recession is deeper than is was pre-austerity. On the other hand, Greece tried no austerity, and we see how that played out. //edit//And in the UK - austerity hasn't even started yet. Government spending is still rising in real terms.
alan_cx 14y ago
Do we now? Look at the cost of the military and its uses. I didn't make government spend on that. Look at all the paranoid post 9/11 security measures. What proportion of your money is being spent on those things compared to, say, education, health or even welfare? Who actually asked for all that? To be fair, I suppose it could be called job creation. We don't make the government spend too much money, they chose to spend all that money because they are backed by the people who benefit from the spending of all that money, and its not the working or middle class. Remember those discussions about how bent and corrupt lobbying is? They are the people getting your money. Not "we". Makes me laugh, all the US revulsion to socialism, while the US has one of the biggest state funded job creation strategies in the capitalist west. Its just that it is called the military rather than anything too socialist sounding. It also get the poor an education, at the risk of their lives. Shame its about killing and paranoia, rather than creating and earning. Yes, the military drive some innovation, but man, really? In the 21st century?
- nickik 14y ago
  > What proportion of your money is being spent on those things compared to, say, education, health or even welfare While I agree that money is not well spent, its a myth that putting more money into somewhere must leed to better results. The US allready spends tons of for example education, more then many other countrys but test results are getting worse. The same in healthcare. The US does not have a money problem, its a institutional problem.
nickik 14y ago
I think islanders where luck that the goverment (including central bank) did not have the power to do what they wanted. The central bank garantee there banks that the would not be allowed to fail, this was clearly stated in a report around 2004.
damoncali 14y ago
Ever wonder who was buying all the shitty mortgages packed up by Wall St? I mean who would be so stupid as to purchase that crap? Look no further than Iceland.

okamiueru 14y ago

Iceland jailed bankers, and paid for the citizens' debt. I don't see why the US can't jail people responsible for the crisis, even though the banks are too big too fail. In other words, I don't see how banks are 'too big' to receive a new CEO and lose a few employees.

megablast 14y ago
There are too many people who were responsible, and most of them were just doing there jobs. Who would you pick as responsible, especially when laws aren't broken. It is too simplistic to run around decrying the fact that nobody was jailed.
- RexRollman 14y ago
  Just doing their jobs? Who's just description says "fraud" on it?
  - damoncali 14y ago
    The credit crisis was not caused by fraud.
- fnordfnordfnord 14y ago
  >>There are too many people who were responsible, That makes it more important to sort it out, not less. >>and most of them were just doing there jobs. That's never been a good excuse for anyone caught delivering a load of drugs. >>It is too simplistic to run around decrying the fact that nobody was jailed. No, not really. Jailing people is our answer to almost every problem. We imprison people even when it is obvious that imprisonment has a strong counter-productive effect. Yet, in one population where I'd argue that imprisonment would have a strong deterrent effect... nothing. It's not as though there is a lack of evidence of serious crime, either. On the contrary, criminality in finance is so glaringly obvious that people are tiring of pointing it out, while others simply work around it knowing that nothing will be done.
gadders 14y ago
What like Lehmans or Bear Sterns? Banks have lost thousands of employees.
deleted 14y ago
[deleted]
damoncali 14y ago
The vast majority of the people "responsible" were not doing anything wrong or illegal. Who is responsible? Anyone who: -Sold a house at an inflated price -Bought a house at an inflated price -Sold a mortgage to someone who could not afford it -Bought a mortgage that they could not afford -Sold MBS -Bought MBS -Used or provided leverage to buy MBS -Insured these transactions with derivatives or other instruments Who, precisely, would you like to arrest, and for what? This was not the result of fraud (although I'm sure there was some of that) but the result of a systematic setup for failure. Even if you cleaned up all of the fraud, it still would have happened.
- moe 14y ago
  The problem is not that something illegal happened. The problem is that what happened wasn't illegal. Prosecution is boring and pointless. We should focus on limiting the damage that the next crisis can do. There's the real problem: Nothing happens in this regard. The beneficiaries of the current system have become powerful enough to deflect any external influence on their schemes. That is the question of our time: How can we break this regime before we find ourselves (or rather: our children) living in a dystopia. As of today the odds are not looking good.
  - damoncali 14y ago
    Those are systemic changes, though. Breaking up banks, reinstating Glass Steagall, that sort of thing. I don't think those solutions are out of reach. It will be tough, but it certainly seems doable. It is a shame that politicians are demagoguing with all this "they need to go to jail" talk, because it is a distraction from the actual problem. That is simply that when too much leverage is applied to the same bet and hedged in the same way by everyone, it will blow up catastrophically when things go bad. That has nothing to do with legality or fraud or any such thing, and everything to do with regulation. It was a political and intellectual failure, not a moral one.
    - moe 14y ago
      It is a shame that politicians are demagoguing with all this "they need to go to jail" talk Depending on how cynic you are you could believe this is exactly the message that $wall_street wants them to push. Everyone knows that nobody relevant is going to jail anyway, but it's a nice, superficial "debate" to keep the general public busy with... Nice in the sense that you can apparently drag it out near infinitely. Remember: Lehmann crashed 5 years ago. Yet when you look at the state of discussion in the mainstream media you'd think it happened just yesterday.

crdoconnor 14y ago

Sweden followed a more sensible course of action, though. They fully nationalized the banks, kicked out the top management, wrote off the bad loans and then re-privatized the banks a few years later. >The sad truth, to me, is that we are responsible because we make our governments spend too much money. Our governments do not "spend too much", the main economic problems we have are too much bad debt (leading to zombie banks), an excess of fraud in the financial sector and not enough economic activity as a result, resulting in high unemployment. A government can never spend too much money (it is created with a few strokes of a computer keyboard). They can only spend beyond the limits of the economy's capacity. Right now almost every western economy is operating way under capacity, which is obvious if you look at almost any metric from inflation to employment to inventory. The government spending more would actually help, although what we really need is for the banks to start writing off bad debts - which they don't want to do because then they would be insolvent.

gadders 14y ago
Government spending doesn't help. That's Keynesism which is widely discredited.
- mercurial 14y ago
  My understanding is that it was widely discredited before the financial crisis, back when economists thought they actually understood economy and that economic crisis were a thing of the past. Then reality happened, and it seems that US government spending has kept the economy going to the dogs. On the other hand, looking around in Europe, I don't manage to find a single country where austerity measures appear to have produced anything than deeper recession.
  - gadders 14y ago
    The UK is hovering around the recession borderline, but I wouldn't say the recession is deeper than is was pre-austerity. On the other hand, Greece tried no austerity, and we see how that played out. //edit//And in the UK - austerity hasn't even started yet. Government spending is still rising in real terms.

alan_cx 14y ago

Do we now? Look at the cost of the military and its uses. I didn't make government spend on that. Look at all the paranoid post 9/11 security measures. What proportion of your money is being spent on those things compared to, say, education, health or even welfare? Who actually asked for all that? To be fair, I suppose it could be called job creation. We don't make the government spend too much money, they chose to spend all that money because they are backed by the people who benefit from the spending of all that money, and its not the working or middle class. Remember those discussions about how bent and corrupt lobbying is? They are the people getting your money. Not "we". Makes me laugh, all the US revulsion to socialism, while the US has one of the biggest state funded job creation strategies in the capitalist west. Its just that it is called the military rather than anything too socialist sounding. It also get the poor an education, at the risk of their lives. Shame its about killing and paranoia, rather than creating and earning. Yes, the military drive some innovation, but man, really? In the 21st century?

nickik 14y ago
> What proportion of your money is being spent on those things compared to, say, education, health or even welfare While I agree that money is not well spent, its a myth that putting more money into somewhere must leed to better results. The US allready spends tons of for example education, more then many other countrys but test results are getting worse. The same in healthcare. The US does not have a money problem, its a institutional problem.

nickik 14y ago

I think islanders where luck that the goverment (including central bank) did not have the power to do what they wanted. The central bank garantee there banks that the would not be allowed to fail, this was clearly stated in a report around 2004.

damoncali 14y ago

Ever wonder who was buying all the shitty mortgages packed up by Wall St? I mean who would be so stupid as to purchase that crap? Look no further than Iceland.