hey guys remember no more government bailouts

[The Omega Concern]

it's good that it failed and that they'll end up taking their time with the process. It'll expose Bush even further for being such a fear mongerer and probably get Paulsen out of the picture, we can all hope. These guys have been like the Keystone cops while the crack addicted wall st. freaks think of anything to get more crack for themselves, NOW!!!

[Future Boy]

Pelosi and the Dems had the numbers to craft and push through whatever bill they choose to, ******* as many safe guards. Pelosi not wanting to be held responsible for an unpopular bill, so they compromised out this turd of a bill that no one really wanted. So important, but not enough to go it alone if needed. But it's all the Republicans fault. Those Republicans who in the same position would find a way to force whatever they wanted through. Well that's one way to look at it.


Lets see what Dennis thinks about all this.


REP. DENNIS KUCINICH: This is a copy of the bill which will provide for a $700 billion bailout of Wall Street. It has provisions in it where it talks about helping homeowners, but when you read the fine print, you see it has language like “may” instead of “shall” and “encouraging” instead of “mandating” help for the millions of homeowners who are worried right now about whether they’re going to lose their home. There’s no help for them in this.

So what we have here is a rescue plan that essentially gives all the speculators a bailout and puts the bad debts in the custody of the government. The president of the Dallas Federal Reserve Bank has said that this plan could create a fiscal chasm, says that the problem isn’t tight monetary policy, it’s the reckless behavior of some of these investors who have now found themselves in a position where a government bailout is going to help reward their bad behavior.

AMY GOODMAN: Is it any better than when it was first introduced by the Treasury Secretary, by Henry Paulson?

REP. DENNIS KUCINICH: Well, you know, that implies that you would accept the underlying premise. I reject the underlying premise that we needed this bill. And as a matter of fact, that we’re putting this up before an adjournment in an election season shows that Congress is being put under extraordinary pressure to bail out Wall Street. We haven’t looked at any alternatives, Amy. This is—you know, it isn’t as though, if you had a liquidity crisis, that—you know, a real one—that you’d start to look at all the alternatives. We haven’t done that. We have a bill here, a bill of more than a hundred pages, that we haven’t had a single hearing on the bill, you know—on the concept, yes, on what Paulson and Bernanke asked for initially. But, you know, we need to have hearings on this. There’s 400 economists and three Nobel Prize-winning economists who have said, “Whoa, wait a minute! What are you doing? Why are you rushing this?” You know, this thing doesn’t smell right, frankly.

AMY GOODMAN: What do you think has to happen right now?

REP. DENNIS KUCINICH: Well, you know, Congress better get ready with a plan B. If this thing goes down, we need to find a way to help Wall Street pay for its own problems. You can do that with a 20—.25 percent stock transfer tax, cancellation of dividends. You know, make the shareholders and the investors have to pay for the funny business that was going on on Wall Street. Why make the taxpayers pay? You know, the very underlying idea of this needs to be challenged, and frankly, there hasn’t been enough of that going on.

Well, what we have is a transfer of wealth, actually. It’s a continuation of a transfer of wealth. This whole government has become nothing more than a big machine that transfers the wealth upwards with our tax policies, our energy policies, with this fiscal policies, with the war. All the wealth of the country goes from the pockets of the people into the hands of a few. This is a very dangerous moment. You know, it’s the biggest amount of injection of capital by the government in a single time since the New Deal. And frankly, there is no trickle down here. There’s just rewarding bad behavior.

AMY GOODMAN: It sounds like it was mainly the House Republicans who balked, who revolted on Friday. Yet, you and a number of your colleagues are joining them. Do you believe this will pass today?

REP. DENNIS KUCINICH: It’s going to be a very close vote. And I don’t see this as a partisan issue, by the way. I mean, in a way, the debate that tries to make it a partisan issue is a diversion. This is really whether or not people will side with Main Street in a struggle with Wall Street, because, you know, this is not about left or right. This is about up or down, and it’s about the color green.

And frankly, Wall Street is—has put itself on a trajectory with now we have almost a quadrillion—half a quadrillion dollars of derivatives that are out there, floating out there. People have said that if this is intended to be a fix, it’s a joke, on one hand. On the other hand, who’s paying for it? Why are we rushing this? I don’t—you know, and everything about this, I think, is unacceptable.

AMY GOODMAN: Congressman Kucinich, what happens if this doesn’t pass?

REP. DENNIS KUCINICH: Well, that’s exactly right. I mean, we need to be ready with plan B, which helps Wall Street restrain some of this bad conduct, which immediately, you know, puts—looks at some of the issues of liquidity that have to do with the policies of the Fed. We had a former head of the FDIC tell a group of congressmen yesterday that the Bush administration has been going around the last few weeks, actually, so tightening up on the practices of banks that they’re forcing them to have bigger reserves, which in a way would, you know, kind of create—help to create the kind of tight money policies that we’re saying we’re trying to alleviate with this bill. So, you know, there needs to be a deeper look at this.

It seems to me there’s a possibility that this crisis has a little bit of manufacture to it. And that really concerns me, because we haven’t had enough time to look at this in an in-depth way, to analyze the impact of it on the economy, to see if it’s going to do anything about a recession that we’re obviously headed into, to see if it’s going to handle the underlying concerns on Wall Street about the speculation and a lack of regulation. The bill doesn’t, by the way, address anything about the speculation, anything about the lack of regulation. The SEC has failed. The Fed has failed. And we’re essentially telling all the same actors, “Go for it. You know, here’s another opportunity,” except this time it’s with taxpayers’ money.
---


And my favorite, nothing like selling out the little people all in the name of Unity. Let the capitulation begin:

---
AMY GOODMAN: Right, but the Democrats are in charge of this.

REP. DENNIS KUCINICH: Right. You know, I’ll tell you something that we were told in our caucus. We were told that our presidential candidate, when the negotiations started at the White House, said that he didn’t want this in this bill. Now, that’s what we were told.

AMY GOODMAN: You were told that Barack Obama did not want this in the bill?

REP. DENNIS KUCINICH: That he didn’t want the bankruptcy provisions in the bill. Now, you know, that’s what we were told. And I don’t understand why he would say that, if he did say that. And I think that there is a—the fact that we didn’t put bankruptcy provisions in, that actually we removed any hope for judges to do any loan modifications or any forbearance. There’s no moratorium on mortgage foreclosures in here. So, who’s getting—who’s really getting helped by this bill? This is a bailout, pure and simple, of Wall Street interests who have been involved in speculation.

And I don’t, for the life of me, understand why this is going to do anything to address the underlying problems in the economy, which actually had to do with the recklessness. This is what the president of the Federal Reserve Bank in Dallas said, that—and, you know, I might have the actual quote here. Listen to this quote: he said, “The seizures and convulsions we’ve experienced in the debt and equity markets have been the consequences of a sustained orgy of excess and reckless behavior, not a too tight monetary policy.” This is the Dallas Federal Reserve Bank president, Richard Fisher.

So, you know, we’re getting stampeded here to vote for something that doesn’t help homeowners, that doesn’t do anything about foreclosures, that doesn’t help those people who have been in bankruptcy and are looking for a way out. As a matter of fact, it made sure they can’t get out. So, who’s this for? It’s for speculators. It’s to play a game that provides some temporary help in the market, and, you know, you might see an uptick today if this passes the House. On the other hand, if it doesn’t, we need to be ready to find a way for Wall Street to address its problems without having to tap the increasingly diminishing resources of the federal taxpayers.

---

More at http://www.democracynow.org/2008/9/2...tates_congress

[jczeroman]

Thanks God. Now let's take our medicine for a few months and get this correction over with.

[Debaser]

Originally Posted by bardy

I want to know what would happen if there were no bailout.

tyler cowen (libertarian economist):

The best and worst case scenarios

The best case scenario: The bad banks continue to be bought up, there is no run on hedge funds next Tuesday, only mid-sized European banks fail, money market funds keep on buying commercial paper, and the Fed and Treasury continue to operate on a case-by-case basis. Since Congress doesn't have to vote for something called "a bailout," it can give Paulson and Bernanke more operational freedom than they would have otherwise had. The American economy is in recession for two years and unemployment does not rise above eight or nine percent.

The worst case scenario: Credit markets freeze up within the next week and many businesses cannot meet their payrolls. Margin calls cannot be met and the NYSE shuts down for a week. Hardly anyone can get a mortgage so most home prices end up undefined rather than low. There is an emergency de facto nationalization of banks to keep the payments system moving. The Paulson plan is seen as a lost paradise. There is no one to buy up the busted hedge funds, so government and the taxpayer end up holding the bag. The quasi-nationalized banks are asked to serve political ends and it proves hard to recapitalize them in private hands. In the very worst case scenario, the Chinese bubble bursts too.

I still think some version of the best case scenario is more plausible, but I wish I could tell you I am sure.

[Nimrod's Son]

Originally Posted by sppunk

Nothing to do with a speech, she had been pushing for a floor vote prior to it reaching even caucus consensus.

this.

She pushed for a vote probably knowing it would fail.

[Nimrod's Son]

Originally Posted by Ever

I think the government should put those 700 billion dollars they were gonna give to an inflated mortgage industry and shove it into education/health/infrastructure and get the foundations of a strong middle class and a real economy happening again.

Here's a hint encourage automation/retraining instead of exploiting cheap labor in sudan or something

But... people seem to think this is a magic stockpile of money that's just sitting around. Like "what do we do with this extra 700B?" It's not real money and the last thing we need to do is go into 700B debt to invest in "education" and the like, which the federal government should stay the hell out of to begin with.

[Nimrod's Son]

Originally Posted by Gish08

It doesn't fucking matter. Pelosi ensured that there would be enough votes on the Democratic side if Republicans held up their end of the deal. They did not. The Democrats on the other hand had enough votes to make it work. And this wasn't even their bill! If the Republicans voted like they said they would have, this would have gone through. But it turns out that Democrats wanted it more than Republicans.

It's funny. Boehner is crying today about how many Democrats voted nea even though Republicans were responsible for shooting it down. If the god damn Republicans would have done what they committed to, the Democrats who happened to vote against it would be irrelevant.

This is almost entirely the fault of the GOP. There's clearly an internal power struggle and they'll stop at nothing -- this includes completely wrecking the economy in the biggest economic crisis since the great depression -- for some kind of tangible gain.

It's more of the same "gotcha" bullshit from this party, and they're likely going to pay dearly for it in the fall. McCain just made one step closer to getting his ass kicked. Obama now basically has a 1 in 4 chance of a blowout, and rightfully so.

You are so ridiculously partisan, it's not even funny anymore. Enjoy drinking your Kool-Aid.

First of all, this was a bill from President George W. Bush, Republican, and supported by most of the House Democrats. It was a bad bill, and failed to enact the safetys or the alternatives that many in the House want. This wasn't "political dirty tricks!!!!!"

Seriously, you need to grow or, or take a class or two before you start blowing this shit from your ass on this board.

[Nimrod's Son]

Originally Posted by jczeroman

Thanks God. Now let's take our medicine for a few months and get this correction over with.

You and I both know that's not going to happen. There are too many politicians in the pockets of too many people who stand to lose money if that happens.

[Eulogy]

Originally Posted by Nimrod's Son

You and I both know that's not going to happen. There are too many politicians in the pockets of too many people who stand to lose money if that happens.

since you and jczeroman are so clearly against the government taking any action here, i'll ask you two what will happen if no action is taken. would it be catastrophic? i assume you don't think so, but then why do so many economists think it would be? are you basing your thoughts on this situation on principle or on practicality?

[sppunk]

Economists don't think it'll be catastrophic, the Bush administration says it will be - big differences there.

Most economists don't want a bailout, either, unless they have direct ties to Wall Street firms.

[Debaser]

Originally Posted by sppunk

Most economists don't want a bailout, either, unless they have direct ties to Wall Street firms.

Oh, really? I'd like more on this. (I honestly don't know)

[Eulogy]

Originally Posted by Debaser

Oh, really? I'd like more on this. (I honestly don't know)

From what I've gathered, most have said that the proposed bill was a bad one. but that something needs to be done. correct me if i'm wrong though.

[Nimrod's Son]

Originally Posted by Eulogy

From what I've gathered, most have said that the proposed bill was a bad one. but that something needs to be done. correct me if i'm wrong though.

Those are television pundits and politicians though.

[Nimrod's Son]

Originally Posted by Eulogy

since you and jczeroman are so clearly against the government taking any action here, i'll ask you two what will happen if no action is taken. would it be catastrophic? i assume you don't think so, but then why do so many economists think it would be? are you basing your thoughts on this situation on principle or on practicality?

It would be worse in the short term, but better in the long term.

I liked the example of a heroin addict - you can give him little bits of heroin, or you can have him quit cold turkey. There's more short-term problems with a cold turkey approach, but the long term benefits are better.

The problem is that the government is attempting to make "no disruption in the economy!" when, you know, there has been a disruption.

[Nimrod's Son]

An Aussie perspective:
http://www.theaustralian.news.com.au...-20261,00.html


Blame the bubble on FDR, Jimmy Carter and Bill Clinton



September 30, 2008

Johan Norberg, on his blog JohanNorberg.net, points out the Democratic intervention that caused the financial crisis
SOME milestones in the prehistory of the crisis. 1933: As part of the New Deal, investment banks are stopped from also acting as commercial banks (which would have given them bank deposits and more stability). 1938: As part of the New Deal, president (Franklin D.) Roosevelt creates Fannie Mae and in 1970 Congress creates Freddie Mac. With their implicit government guarantees they can offer cheaper loans and expand until they dominate the American mortgage market. 1989: The American government step(s) in and pay(s) for the savings and loan crisis, which sets a precedent. 1995: The Community Reinvestment Act is revised so that banks and thrifts are forced to give home loans to low and moderate-income households as well. In return they are allowed to repackage and sell those sub-prime risks to others, which Bear Stearns pioneers in 1997. 2001-03: Instead of letting the market get rid of bad businesses and loans after the dotcom bubble and 9/11, the (Federal Reserve) reduces its rate from 6.5 per cent to 1 per cent (with) a dramatic expansion of the money supply, which creates a real estate bubble.
Mae and Mac ran leverage ratios that exceeded 60 to one (cheered on by the Democrats) to keep giving loans to people who could not really afford it. It only took more traditional interest rates for the bubble to burst. The independent investment banks that did not have access to bank deposits collapsed and almost brought the whole system down. All those who now think that the solution is to give more powers to politicians, authorities and central banks should look at what they did with the powers they already had.
Quadrant Online provides more detail:
IN the past week, the Australian media (has) given copious quantities of space and time to commentators seeking to blame the American sub-prime loans crisis on the market economy. These commentators, most of them from state-funded universities and media, think their own commitment to state ownership, government intervention and a heavily regulated economy has been vindicated as market forces and corporate greed apparently spin out of control. It is revealing, therefore, to re-read an article from the conservative City Journal in 2000 predicting problems for the banking sector from the Clinton administration's resurrection of Jimmy Carter's 1977 Community Reinvestment Act, which appears to have been the major single factor in the origins of American high-risk sub-prime loans. Under Bill Clinton: banks were required to provide loans on an affirmative action basis to poor inner-urban ghettoes; the scheme's intentions were to help low-income earners buy homes and revive decaying neighbourhoods; much of the money was funnelled through a nationwide network of left-wing community activist groups; government regulators were appointed to measure banks' performance and ensure they reversed their previous racially discriminatory policies of declining to lend money to high-risk clients; by 2000, banks had committed nearly $1 trillion for loans to low-income ethnic and inner-urban groups; at the time, the chairman of the US Senate banking committee, Republican senator Phil Gramm, denounced the program as a vast extortion scheme against the nation's banks.

[alexthestampede]

http://query.nytimes.com/gst/fullpag...=&pagewanted=1
"Published: September 30, 1999"


mainly clinton

[Eulogy]

Originally Posted by Nimrod's Son

Those are television pundits and politicians though.

not all of them are

[sppunk]

Originally Posted by Debaser

Oh, really? I'd like more on this. (I honestly don't know)

I can't cite anything at this moment, but go away from journalists/TV talking heads/politicians and look at guest columns and things.

Most think something has to be done, but they don't think a government bailout is key. More of a "put the assholes in jail" deal, I believe.

[Andrew_Pakula]

[wHATcOLOR]

Originally Posted by sppunk

No one here is over 50

Wilford Bramley, Mark Foley, and ******sDad, to name a few...

[Debaser]

I finally did find an anti-bailout perspective from an economist investigative journalist on tax and economic issues, I regularly like to read.

David Cay Johnston:

Celebrating The Bailout Bill's Failure--And Looking Ahead

Whether you favor the $700 billion bailout or not, the House vote today should make you cheer--loudly.

Why?

Because the majority vote against it shows that Washington is not entirely in the service of the political donor class, by which I mean Wall Street and the corporations who rely on it for their financing. These campaign donors, a narrow slice of America, have lobbied and donated their way into a system that stacks the economic rules in their favor. But faced with as many as 200 telephone calls against the bailout for every one in favor, a lot of House members decided to listen to their constituents today instead of their campaign donors.

The GOP members voted overwhelmingly against the bill, while two-thirds of the Democrats favored it. Right now you can be sure that cajoling and arm twisting is underway in an effort to persuade 16 GOP members (or perhaps a dozen Republicans and a few Democrats) to vote the public largesse for Wall Street.

None of this is to say that we need, or do not need, some government intervention in the markets. Rather it is to say that the administration has failed to make its case, instead assuming that just as with the war in Iraq and the Patriot Act, it could stampede Congress into thoughtless action and terrify the public into going along.

Also, do not get stampeded by the awful, ill-informed, and heavily one-sided coverage on cable TV, which I have been monitoring. Several friends have emailed me in a panic asking if they should sell their holdings. Politicians and cable news deserve a lot of blame for fostering fear.

The Dow Jones Industrial Average, a measure of just 30 companies out of millions, closed down just under seven percent. Back in 1987 the Dow fell 22 points in a single day, and it was not the end of Western Civilization or even investing.

The stock markets may fall more. They also may rise. After all, Goldman Sachs shares were in a free fall just before the Bush administration declared a crisis, and even with today's 12.5 per cent drop, they are trading at more than $30 per share higher than at the low point eleven days ago.

Questions abound: Do we believe in markets, which can be volatile--or only in managed markets biased by government policy to the upside? Or do we believe in corporate socialism?

Is our economy so fragile that it cannot withstand shocks? Or is it fundamentally sound, as Senator John McCain was declaring until just days ago? And if our economy really is fragile, just how will borrowing $700 billion more to pay for bad loans make things better for anyone but the lenders and some of their customers?

What assurance do we have that borrowing $700 billion will not make things worse? None.

Keep in mind a paper released last week by two economists at the International Monetary Fund, who studied 42 banking crisis over the past 37 years. Their conclusions (not the IMF's) are: bailouts often do not work, they often result in more bad practices, and they distort economies by transferring wealth from taxpayers to bankers and their customers.

Congress held hearings last week, but it only listened to the advocates of the bailout. We deserve better. If Americans have to give up, on average, more than $2,300 of our substance, then it's incumbent on the plan's advocates to make a compelling, coherent case for sacrifice to the national good. But remember, this money is being sought by an administration that told us not to sacrifice after 9/11, but to go shopping.

It is also an administration that, as I revealed in a story in The New York Times in 2004, said that the American taxpayer could not afford an extra $12 million to pursue Osama bin Laden's financing of terrorist plots. And how tiny is this sum? Roughly the interest every three hours on $700 billion. Ponder that--we cannot bear $12 million to get a murderous zealot determined to strike again, but we can afford 58,000 times that much in a bid to avoid the inevitable declines in asset prices that were artificially inflated by the offerings of Goldman Sachs and other Wall Street firms?

Perhaps the dissolution of this bailout bill means that we will now get a serious look at just where the problem is, how pervasive or concentrated bank problems are, and whether there are less expensive options, as suggested by economists like NYU's Nouriel Roubini, BU's Larry Kotlikoff and Columbia's Perry Mehrling, and the Center for Economic Policy and Research's Dean Baker.

Maybe we will also get answers to some hard questions. Like:

--Why was the CEO of Goldman Sachs in the room when government officials decided to bailout the insurer AIG, especially since Goldman has about $20 billion, half of its shareholder equity, at risk on AIG? Keep in mind that Treasury Secretary Paulson is the immediate former CEO of Goldman.

--Why was Lehman Brothers, a Goldman competitor, the only Wall Street firm in trouble so far left to collapse on its own? The Wall Street Journal reports today that it was the collapse of Lehman (which because of its structure may not have been an attractive firm for purchase) that "triggered cash crunch around the globe."

--Has Treasury obtained from every bank the amount of its illiquid assets, which would tell us if the problems are concentrated at a few banks or are pervasive?

--Would a temporary provision in the bankruptcy code, allowing people with toxic mortgages to get their loans rewritten or pursued to foreclosure, be a cheaper and better alternative?

Disclosure, transparency, options--those should be the issues in the next few days.

[Ever]

Originally Posted by Debaser

Oh, really? I'd like more on this. (I honestly don't know)

Some milford or milton guy from harvard just spoke on CNN outlining why the bail out is completely horrible. He also says its likely the bill will eventually get passed which is very terrible. I've just had my faith in the U.S legislative system boosted I don't want it to come crashing down.

[Eulogy]

the bailout in its current form or any sort of "bailout"

[Nimrod's Son]

Originally Posted by Andrew_Pakula

That video is completely wrong. It's not "deregulation" that caused this... look at the article that alexthestampede (of all people) posted, and the one that I posted. It's regulation that caused this, regardless of what Pelosi thinks. Of course to fix this now, we're going to get - you guessed it - more regulation and government control.

[Debaser]

nimrod & alexthestampede,

what utter ridiculous bullshit.

[Debaser]

massive and thorough debunks of the wingnut "blame the minorities" theory here and here. bare in mind that nimrod resorted to a fucking australian news site for his source because all other closer sources are from obvious wingnut sites.

[jczeroman]

Originally Posted by Eulogy

since you and jczeroman are so clearly against the government taking any action here, i'll ask you two what will happen if no action is taken. would it be catastrophic? i assume you don't think so, but then why do so many economists think it would be? are you basing your thoughts on this situation on principle or on practicality?

Well, define "catastrophic?" There won't be bread-lines and 25% unemployment - but there will be a period of time where the bad debt is cleaned up. This normally brings about deflation, low consumption, higher interest rates (market rates, not the fed rate) and unemployment. The government sitting back and letting this happen through natural processes such as mergers, buyouts, downsizing and streamlining will result in the shortest period of discomfort - and in fact, enables the market to create new innovations to prevent these errors from happening again. If they insist on throwing pots of money around during the correction, causing market distortions, then assets are not going to go where they are needed, lengthening this period and possibly augmenting it.

If a bailout is passed and the government starts tinkering, then the correction will just be passed forward a few years, compounding it's severity. Moreover, irresponsible behaviour will be incentive, strengthening bad firms and rewarding unethical businessmen.

Realistically, the US market is still powerful enough to rebuild a catastrophe, but continuing to let it get worse by sustaining intervention definitely tempts fate.

[Ever]

Originally Posted by jczeroman

Well, define "catastrophic?" There won't be bread-lines and 25% unemployment - but there will be a period of time where the bad debt is cleaned up. This normally brings about deflation, low consumption, higher interest rates (market rates, not the fed rate) and unemployment. The government sitting back and letting this happen through natural processes such as mergers, buyouts, downsizing and streamlining will result in the shortest period of discomfort - and in fact, enables the market to create new innovations to prevent these errors from happening again. If they insist on throwing pots of money around during the correction, causing market distortions, then assets are not going to go where they are needed, lengthening this period and possibly augmenting it.

If a bailout is passed and the government starts tinkering, then the correction will just be passed forward a few years, compounding it's severity. Moreover, irresponsible behaviour will be incentive, strengthening bad firms and rewarding unethical businessmen.

Realistically, the US market is still powerful enough to rebuild a catastrophe, but continuing to let it get worse by sustaining intervention definitely tempts fate.

In concrete terms, just out of curiosity, what do you mean by "innovations"? What would they entail? Moreover how will it stop banks from using homes as a pyramid scheme style funneling of wealth or was that the unethical business practice jazz?

I agree with what you're saying though.

[jczeroman]

Originally Posted by Ever

In concrete terms, just out of curiosity, what do you mean by "innovations"? What would they entail? Moreover how will it stop banks from using homes as a pyramid scheme style funneling of wealth or was that the unethical business practice jazz?

I agree with what you're saying though.

Unfortunately, it's not a concrete statement. I mean, if they are innovations yet to come, then I don't know the specifics because they haven't been invented yet. What we do know is that allowing bad businesses to fail, keeps the ones that had better, wiser, more ethical (maybe) business models around. These practices stay in and are further refined while those that failed are purged from the corporate gene pool.

Also, the problem wasn't that banks were using homes as wealth funnels because they good - rather Bush ande congress passed numerous incentive packages and spending bills that radically distorted the market and (this is key) incentivised the kind of wanton greed and bad investments that are now going bust. While the potential for greed is inherent in all people, these kind of government incentives neuter the market's ability to handle bad/immoral decisions (failures, firings, arbitration, new entrants, competition, innovations, etc...).

[Eulogy]

Originally Posted by jczeroman

Unfortunately, it's not a concrete statement. I mean, if they are innovations yet to come, then I don't know the specifics because they haven't been invented yet. What we do know is that allowing bad businesses to fail, keeps the ones that had better, wiser, more ethical (maybe) business models around. These practices stay in and are further refined while those that failed are purged from the corporate gene pool.

Also, the problem wasn't that banks were using homes as wealth funnels because they good - rather Bush ande congress passed numerous incentive packages and spending bills that radically distorted the market and (this is key) incentivised the kind of wanton greed and bad investments that are now going bust. While the potential for greed is inherent in all people, these kind of government incentives neuter the market's ability to handle bad/immoral decisions (failures, firings, arbitration, new entrants, competition, innovations, etc...).

ok, but can't the government assist in purging those practices after helping them to continue to exist? i know that goes against your principles, but from a practical standpoint, is there some concrete reason as to why that couldn't work?