Comments on: Government Ownership of Banks: A Really Bad Idea

By: Jess

Jess — Tue, 28 Oct 2008 00:02:01 +0000

mjk:
Agreed. The government “bailout” was simply a redistribution of money and not a way to generate money that would stimulate the economy. They shouldn’t have been rewarded.

By: first history

first history — Mon, 27 Oct 2008 03:55:19 +0000

Correction: This sentence should say: If you don’t like partial nationalization of the banks, this week the Fed will be taking positions in insurance companies. Also, GM reportedly wants government help with its merger wih Chrysler. The handouts are just beginning.

By: first history

first history — Mon, 27 Oct 2008 03:46:19 +0000

The place to start is with the Democratic congress.Liberal ideas just don’t work. Last time I looked the bailout was proposed by a Republican administration, which also had control of Congress for six of the last eight years, and did not pass any significant regulation of Fannie, Freddie, or the credit default swaps market. In fact, it was Republicans that created the credit default swaps market through theCommodity Futures Modernization Act of 2000, which has since cratered. See also the 60 Minutes report tonight. If you don't like partial nationalization of the banks, this week the Fed will be taking positions in ">insurance companies. The next Administration will be cleaning up this mess for years and we will be paying for it for decades.

By: Will Becker

Will Becker — Fri, 24 Oct 2008 17:07:24 +0000

The place to start is with the Democratic congress.Liberal ideas just don’t work.

By: JFM

JFM — Fri, 24 Oct 2008 13:18:16 +0000

I am for bailing out the banks. Otherwise the economy would crumble like in 1929. Problem: bankers will have no incentive to staying on the safe side if they know they would be rescued in case things go wrong. Solution: Bail out banks but send their CEOs and members of the bord to jail. Not one of those jails for white collars where the border with outside world is a line on the floor. Picture Sing Sing or the prison in the “Miracle at Shanksville” movie, instead.

This way you can save the banks without fearing they will be still more reckless in the future. Their CEOs will have a

By: eric

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By: David Wynn

David Wynn — Tue, 21 Oct 2008 03:32:24 +0000

@Quincy:

It’s true that the government played a role in encouraging home ownership, but the government didn’t force lending agencies to stop checking for borrowers’ ability to pay their loans, nor the banks the securitize the loans four times over, obfuscating the risk to where few could see what was coming.

The government also had zero influence in the credit default swap market, which is what caused the collapse of Lehman to spread to AIG and potentially beyond. No one forced investors to use CDS insurance policies as gambling chips, and to imply otherwise is dishonest.

Again, I agree that there was pressure from the government, but that doesn’t excuse the bad business practices at multiple levels that set up our financial system for these tough times.

And I would charge that if either party had a supermajority, they would aim to influence the banks in which they held stocks, not just the democrats. Despite this, I still think the liquidity injection plan is best because it’s the consensus view of economists at present, and puts money quickly into the hands that need it. That’s all that can be known for certain. What politicians will do 6 months from now is something we can only speculate about.

By: skink

skink — Tue, 21 Oct 2008 01:16:58 +0000

just answer me this:

how many Canadian banks have failed during the recent crisis?

how many Australian banks have failed?

go figure

By: thegr8_1

thegr8_1 — Mon, 20 Oct 2008 20:46:52 +0000

There is a Wall Street Journal article today they did not know they had to book warrants to buy common stock as a liability when doing the capital infusion. The SEC and FASB had to change the rules or the banks balance sheets would be no better off with the infusion. Aren’t there any accountants who don’t need fingers and toes to count, hey Paulson why didn’t you call the I R S for help not that they are by any means intelligent.

By: Someone75

Someone75 — Mon, 20 Oct 2008 19:17:37 +0000

mjk:

I agree. Recession is a normal part of the economic cycle. To think we can prevent it is absurd. There are a variety of reasons concerning why we are where we are today. Time to face the music. If the economic world gets a shake-up, they had it coming.