$700 billion from us to save the banks. Good?

a bailout would be more costly. it won't stop at these $700 billion. once a precedence is set it would have to be done again and again. or what argument could a government come up with if it didn't? no, we should make it clear to the banks once and for all that they don't have a free ticket to do whatever they want with people's money. if they don't act responsibly then they have to carry the consequences.
also, do we believe in capitalism or do we not? if we do, a bailout is impossible. if we don't, we should better think up some other rules then, and quickly

I said it in the other thread (the poll) and I will repeat it here. the banks believe in capitalism and free market; it is the rules they like to play by when they win. they have ruined many people's business and fortune that way, cynically saying "well, that's capitalism". and they would strongly oppose any supportive action for other firms. so let them play by these rules when they lose too of course they will cry "this will ruin the economy", but that's a bunch of nonsense. as Friede already pointed out: the resources are all still there. if all the money in the world would suddenly disappear it would not change anything at all. all structures would still be there and functional. maybe some firms will become bankrupt; others will take over for them. now a natural catastrophe, that would be something else. but the economy always rises like Phoenix out of the ashes after a breakdown, and more alive than it was before, as history has shown

IVNORD wrote: BaldFriede wrote: Some reinvestment. The money is being moved from one shark to another. But is still is withdrawn from public circulation. That's not  really reinvestment. Joe Average won't see a dollar of it. When you deposit your money in a bank account, you are in charge of it only nominally. Your bank has a full discretion how to use it. It may use it for a mortgage loan, or a personal loan, or buy treasury paper, or mortgage backed securities. Unless you keep your cash at home, it's in public circulation.

That's my point. You can hardly call it "public circulation" when the money is only being exchanged between banks and stockholders. That's not the public, that's an exclusive circle. We all can see where it leads to now. And the taxpayers are supposed to be putting an eiderdown beneath the banks so they fall softly when their speculations go wrong.
Try getting a loan as Joe Average for a change. The first question you'll be asked is: "Where are your securities"? But no-one ever asks for securities when banks are playing the "Stocks and Bonds" game.

IVNORD wrote: Slartibartfast wrote: IVNORD wrote: Slartibartfast wrote: BroSpence wrote: I found this commentary quite interesting: Another different look on the situation. Good article.  Still I can't help but wonder how many of those who got the crappy subprime loans might not have defaulted if they had been given decent fixed rate loans. First give them loans. Then give them a decent rate. What's next? Start making mortgage payments for them. How special is it Nope, you have defined where the line should be drawn. The point is WHY some people should be GIVEN something?

When I needed a house I was given a loan.  I guess I was just more worthy than others of getting a nice affordable fixed rate. 

If you see a doctor needing help why should you be given care that helps you rather than harms you?

The T wrote: BaldFriede wrote: Some reinvestment. The money is being moved from one shark to another. But is still is withdrawn from public circulation. That's not  really reinvestment. Joe Average won't see a dollar of it.   You're missing the point here BaldFriede (and I'm with you...) Remember: if one person has 100 million dollars and the other one has 0, then economics tell us that each has 50 million! Voila! Everybody is happy!

Hey T, stop talking nonsense

BaldFriede wrote: Some reinvestment. The money is being moved from one shark to another. But is still is withdrawn from public circulation. That's not  really reinvestment. Joe Average won't see a dollar of it.

BaldFriede wrote: IVNORD wrote: BaldFriede wrote: Atkingani wrote: Apparently the issue that Capitalism does better is to produce Panic:  http://en.wikipedia.org/wiki/Category:Economic_disasters_in_the_United_States   Seeing the amount of 'panics' in the Mecca of Capitalism one can reasonably multiply per 10 when other countries are considered. Very nice remark, Atkingani And has any of these "collapses" ever really changed anything basically? Yes, there were a few financial breakdowns, but the country could continue as it did before in the end. And why? Because all the resources were still there. Now a natural catastrophe, that would be something completely different. But an economical one merely means possessions will change. If money was not that overrated in the world but reduced to what it was originally meant to be, a means for evaluation of goods, this would be no problem at all. I don't deny the bank crash will have a deep impact. But only on the surface. If it weren't for those people who "sit" on the money instead of having it recirculate, as would be necessary for a functioning economy, this could not have happened at all. But the accumulation of money that does not get back into the economy circuit is the real problem, not a bank crash. That's only the symptom. Where do you see that happening? in Nepal? Close your eyes to it if you like. Ever read the statistics about of the distribution of  wealth? And noticed how they become more and more lopsided over the years? Withdraw money from the circulation, and the economy will collapse. That law is so basic it does not even need to be explained. And cashing in the profits and accumulating huge fortunes IS withdrawing money.

Huge fortunes wouldn't be huge if they didn't re-invest. Even if you deposit your money in a bank account, it's re-investment

Slartibartfast wrote: IVNORD wrote: Slartibartfast wrote: BroSpence wrote: I found this commentary quite interesting: Another different look on the situation. Good article.  Still I can't help but wonder how many of those who got the crappy subprime loans might not have defaulted if they had been given decent fixed rate loans. First give them loans. Then give them a decent rate. What's next? Start making mortgage payments for them. How special is it Nope, you have defined where the line should be drawn.

The point is WHY some people should be GIVEN something?

BaldFriede wrote: Atkingani wrote: Apparently the issue that Capitalism does better is to produce Panic:  http://en.wikipedia.org/wiki/Category:Economic_disasters_in_the_United_States   Seeing the amount of 'panics' in the Mecca of Capitalism one can reasonably multiply per 10 when other countries are considered. Very nice remark, Atkingani And has any of these "collapses" ever really changed anything basically? Yes, there were a few financial breakdowns, but the country could continue as it did before in the end. And why? Because all the resources were still there. Now a natural catastrophe, that would be something completely different. But an economical one merely means possessions will change. If money was not that overrated in the world but reduced to what it was originally meant to be, a means for evaluation of goods, this would be no problem at all. I don't deny the bank crash will have a deep impact. But only on the surface. If it weren't for those people who "sit" on the money instead of having it recirculate, as would be necessary for a functioning economy, this could not have happened at all. But the accumulation of money that does not get back into the economy circuit is the real problem, not a bank crash. That's only the symptom.

Where do you see that happening? in Nepal?

BaldFriede wrote: IVNORD wrote: BaldFriede wrote: NaturalScience wrote: The bail out funds come from the American public, or rather that we borrow the money and need to pay it back. No one is happy about the proposed plan, but almost every economist agrees that failure to act and shore up the financial/credit system will hurt so much more - the most pain going to the "little guy" if businesses start failing. And in the future, you don't need to be so condescending.  I was making a good faith effort for debrewguy to clarify his post.  I assure you I'm not as stupid as you think I am. So what? These "experts" know which side their toast is buttered on. "Whose bread I eat, whose song I sing", as a German proverb says. No, there will be no real harm done if these banks collapse, even if a lot of firms collapse in their wake. The means of production are still there; they only have to be given to someone else. They are the real wealth, not stocks and money.  A big part of our economy is service economy. And by "service" I don't mean coffee shops. It's a financial service economy if you please. The stock market alone represents 30% of the economy. THe manufacturins is shrinking. The means of production are constantly being given to someone else. Someone else overseas. Can you imagine what will happen if half of the economy implodes? Nothing will happen. Will the cars for transport break? Will the people involved in the service die? It is all still there; the only thing that has to happen is that our values have to change a bit, or rather quite drastically. But better an end with terror than a terror without end. It is simply ridiculous how overrated the well-being of economy has become; everything else has to subordinate to it. It is high time someone blows the whistle on it, and it is a good thing we have this eye-opener now.

Our values will change. But a gradual change is preferable. It'll be less social stress.