October 21, 2010 at 7:00 pm in INFORUM
Says criticism of bailouts ignores severity of crisis
Tags: bailouts, Earl Pomeroy, Election, financial crisis, housend, Kent Conrad, NDSU, North Dakota, Rick Berg, Washington 30 Comments »
Those of us who have parents who lived through the depression of the 30s need to remember those stories and the history that lead up to the depression. There were few regulations and consequently the market was inflated. All it took was a few rumors and there was a run on the banks. The same thing was happening again thanks to NAFTA and mass deregulation of the Bush era. While many may not like the bail out at least the majority of us do have a job or our retirement which is much better than what happened in the 30s. It took WWII to turn that mess around.
Hot debate. What do you think? 38 32
there wasnt much deregulation during the bush years… i.e. housing crisis
Hot debate. What do you think? 27 15
Exactly correct Libertarian. The main cause of the recent collapse was the government warping the home mortgage market via the backing of bad mortgages by Freddie and Fannie. The banks took advantage of this and packaged the mortgages and resold them throughout the financial system. When the mortgage market collapsed, banks & investors lost billions. The government made a second mistake when they bailed out these banks and investors, passing the bill on to the taxpayers. This deregulation of the ‘Bush era’ was overseen by a Democrat congress that did not listen to the warnings of the Bush administration. Also, the depression of the 30′s was worsened and lengthened by government intervention. The best way to move past a mess in capitalism is to allow bad business ventures to fail and move on. Anything else just deepens and lengthens the pain.
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Conrad bemoans not explaining this to people before; Because as Rahm said, ‘don’t let a good crisis go to waste’ or something to that effect. Funny how he tries to justify Obama’s more massive giveaways so close to election time.
Hot debate. What do you think? 36 34
So former President Bush coming out and stating what the government did for the bail outs was absolutely necessary doesn’t do anything for you i would expect. The guy who made the mess basically saying thanks for fixing my issue.. hmmm.
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Of course another liberal looking to the past and not taking responsibility
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Someone’s got to look to the past since you seem unwilling to do so…
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I hold Conrad responsible for his part in this mess. He sits on the banking committee he knows directly what is going on with the banks and the financial institutions of this country. All we are doing with TARP and other government fixes is kicking the can down the road. All we really needed to do was re-instate Glass-Stegall and ENFORCE the LAW (C’mon Holder!)! I don’t care if your Rep or Dem they all played a major role in this debt disaster. It is going to get worse because all they managed to do was paper over the problem for a time. The debt is still on the books of the big banks and now they are starting to see a real cash flow problem, which will cause another Lehman/Bear Sterns explosion. What are they going to do this time? Cut interest rates? Do another TARP?
Well-loved. Like or Dislike: 41 23
And if we want to assign blame there is plenty to go around. The deregulation started in Clinton’s time and just continued through Bush. Republican congress, Democratic congress, doesn’t seem to matter. It really is truly a bi-partisan mess.
I’m not all the crazy about regulation, but that comes with a qualification that without it there would be some ethics to guide you. Watching this banking thing unfold really shows that ethics isn’t even a consideration in the financial industry.
They don’t have to look out for the best interests of their customers? They don’t even have to divulge that while they were taking the customers money they were betting against them? Really?
They bet (and made a huge profit) on the housing bubble collapse? Call me crazy but doesn’t that almost seem to border on treason?
Now they won’t let people go for the quick sell on homes about to be foreclosed, so they don’t have to show the loss as a toxic asset? Common sense says it is better to get SOMETHING out of them than nothing. Those toxic assets are still out there, shuffling them around is just (as Brian says) kicking the can down the road.
We definitely need Glass-Stegall back. How can there be any doubt?
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Conrad supports husein obama and pelosi. Do you really want to compare who did the most harm to the country?
Poorly-rated. Like or Dislike: 26 41
You sound like Glen Beck. Get your own opinion. I would expect as much given your user name.
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I’ll try to emulate you more AM. I can only assume you worked all day on deriving that comeback.
Poorly-rated. Like or Dislike: 14 24
Conrad is in campaign mode for Pomeroy and Democrats. He is always there to point out the problem and blame someone else, but never there to solve anything. Tired of him too.
Hot debate. What do you think? 35 27
Buy gold and silver. Our current econmic system is nothing but a shell game played out with worthless paper that has no backing. Another collapse is inevitable.
Hot debate. What do you think? 27 17
That gold thing is going to get a lot of people hurt. A lot of people point to the Federal Reserve “running the printing press” and causing inflation. While, yes, the Fed is currently causing some inflation, people don’t understand *how*: The Fed deals in imaginary money. When they lend it, they create imaginary money which is paid to the bank. When the bank pays it back, the imaginary money is destroyed. When they buy assets, like bonds, they buy them with imaginary money, and when they sell the assets, the imaginary money is destroyed. At some point, they’re going to dial the policy back, destroy a ton of imaginary money, and the price of gold is going to drop. I’d be pretty leery of buying gold and sliver at these highs.
Truth be told: gold’s “value” is imaginary, too. It’s pretty, but what’s the utility in “pretty”?
To quote Warren Buffett: “…try to be fearful when others are greedy and greedy when others are fearful”. There’s a lot to be said for swimming against the current.
Well-loved. Like or Dislike: 27 3
I would also be leery of buying gold right now. This is not exactly accurate but I picture the value of gold as constant, and the dollar fluctuates around it. When the value of the dollar increases, you can buy more gold per dollar, so the price of gold drops. So in effect, the value of gold is inversely proportional to the value of the dollar and this lends credence to your argument that the value of gold is as imaginary as currency.
On the other hand, gold is more than just pretty. It is highly conductive, resists corrosion, and has a high specific heat making it less than ideal for a toilet seat, but perfectly suited for use in electronics.
Well-loved. Like or Dislike: 16 0
It was the government and the banking community that caused the crisis. Now they are our saviors. They “saved” 8 million jobs but 8 million jobs have been lost. Millions have lost their homes but the banks and Wall Street are making record profits and giving huge bonuses again. The taxpayer, their children and grandchildren are saddled with trillion $ deficits as far as the eye can see. This cartoon says it all: http://venturacountyteaparty.ning.com/photo/art-of-the-collapse11010?xg_source=activity
Well-loved. Like or Dislike: 25 5
Conrad’s absolutely right. The bailout was hatched by the Bush administration and Henry Paulsen. Recently, news organizations have been playing the tape of John Boehner pleading for members of his party to vote for it! That should tell people how necessary it was. People seem to be forgetting about that part (I suspect conveniently). They tried letting banks fail. When Lehman Brothers went belly-up (and Bear Sterns sold itself to JP Morgan-Chase in a fire sale), there was a near panic. It stinks that the bad guys made off with the loot! There’s no doubt about that, but we had a credit crisis. There would have been no lending at all if the government hadn’t ensured that the system wasn’t going to fall.
Everybody should read “The Big Short” by Michael Lewis. It is extremely instructive about where the money was moving, and the roles the big institutions played. For instance, AIG wasn’t bailed out so much for the sake of AIG, but for the sake of the people to whom AIG owed money (BILLIONS to Goldman Sachs).
Propping up the institutions is a double-edged sword, though. While it saved the system, in doing so, we prevented there from being enough of a will to make real change. I still need to read Lewis’ book “Liar’s Poker”, which is about Wall Street’s transformation from efficiently allocating capital (where everybody wins due to efficient economic growth) to essentially just being a big casino where the games played are zero-sum (for every winner there is an equivalent loser).
Well-loved. Like or Dislike: 27 11
If the banks know that there will be no bailout for their mistakes, they will pull back a little bit from the risky ventures that get them there. If I go to the horse track and bet my house and lose it, is the bank going to give it back to me because they don’t want to see my kids thrown into the street? NO. Then why do we feel the need to bail out banks to avert ‘the collapse of the system’? Why save a system that is obviously flawed? Let the system collapse and see what takes its place. It will probably be something better than the current system.
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The banks didn’t know they were going to be bailed out in the first place, and took the risks.
I don’t think you’d be very happy with whatever would have taken the place of the banking system if it had been allowed to collapse. It happened in the Great Depression, people lost every cent they had in most cases. The fortunate ones either got theirs during the run on the banks, or had to settle for pennies on the dollar after the ‘bank holiday’.
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The Unholy Trinity: Republicans – Democrats – Bankers
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Truth be told: goldâ€™s â€œvalueâ€ is imaginary, too. Itâ€™s pretty, but whatâ€™s the utility in â€œprettyâ€?
When paper dollars are worthless you will always be able to find someone willing to accept gold or silver in exchange for goods. Although I agree that gold is overpriced right now and would not but it. Silver is a very good buy at around $24 an ounce right now.
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not at all Gold is an important element used in ultra high tech devices that require an metal with excellent conductivity and does not corode. Gold does not corode. It have industrial applications and has value for that also.
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So, I’m going to go out and buy gold at around a thousand bucks an ounce today, and when the dollar devalues, it’s going to be worth $24? Right. ‘
So, for the amount of money that I could buy a pickup with now, I’ll turn around in a few months/years, and be able to buy a dozen eggs?
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Why didn’t everyone just get a below market mortgage from Countrywide like Gaylord Conrad did? That would have been cheaper than what Gaylord and his cronies did!
Poorly-rated. Like or Dislike: 15 34
When in doubt blame bush right? of course when bush did not have control of the house from 2007 up. now that that is settled lets move forward to the real point of this article. What we need in this country is someone who will TAKE BLAME FOR THEIR OWN ACTIONS. all this article is about is conrad spinning more numbers on the public in the form of meaningless graphs that most people who dont get what they are looking at just think “wow that looks like they have done a lot with all the jobs they have saved.” Lets get some people in office who are going to actually look to have a net jobs CREATED not that well we lost this many but we coulda lost this many so this is how many jobs were made :0
Poorly-rated. Like or Dislike: 14 26
I didn’t elect someone to pull a last minute all-nighter to allegedly save us from a depression. I expect elected officials to regulate big banks and the financial sector so that we never get to the brink of a disaster. Our politicians (Democrats and Republicans both) failed us mightily!
Well-loved. Like or Dislike: 29 2
Kent Conrad is the poster child for what is wrong with the U.S. Congress. He claims to be a budget expert, yet spends money without regard to the debt and deficit. He claims to have all important seniority in the Senate, but hasn’t sponsored or passed any legislation for years. He claims to be a North Dakotan, but is rarely sighted in the state. He claims to be ethical, but accepted a sweetheart deal from Countrywide and has no problem being in the Senate while his wife works lobbying the same group. The stimulus package was a joke – nothing more than a taxpayer ripoff. It’s time to send Conrad packing for his home in Delaware.
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When the dollar reaches the same status of the paper bills in your Monopoly Board game, (and it will if we don’t stop printing money like mad and continue to allow the ponzi schemes of default credit swaps and financial derivatives), you will be glad you own some gold and other commodites that actually have an intrinsic value.
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The first tarp bill was a huge error and is a Bush’s feet as well as the Democrat run congress. The core of the cause for the housing crisis was the well thought out plan to promote minority home ownership. Sound like a great goal on the surface but requiring Freddy and Fanny to purchase the mortguages and all the risk and allowing the banks to keep all the profits and not the risk was at the heart of the housing collapes. As for bailing out the banks… we would have been better off if we had paid down the over valued mortguages directly to the people rather than given the money directly to the banks as we would not have all these forclosures and banks would not have used our money for huge bonuses. The bailout of the auto companies was also a huge error. They should only have been given help AFTER going through bankrupcy. When a company is poorly run you let it die. Thje assests would have been purchased and the companies reorganized using private capital into leaner profitable entities and it would not have cost the tax payers billions transfered to the Unions to rescue them from their part in the mess. Obama has only made the situation worse and put more and more of the private sector into government control. And we all know how efficent the government is.
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