Political Discussion

[justbroke]

And of course I agree with you justbroke that if the banks had all collapsed then we would have had one very large ,very confused National Bank.

And who do you suppose the Government would have run the newly created Bank of the United States?

(I'll give you one hint... their initials are G.S. LOL Because only people of that caliber could ruin a financial system. Misspell intended.)

[backtoschool]

AIG bailout was a must... mostly because AIG held many insurance policies, retirement accounts, and even equipment leases for municipalities across the country. I remember an interview (plea) from several big city mayors pleading that the Federal Government help AIG because all their transportation systems are owned by AIG on a leaseback. Would have wreaked havoc. I also concur that some sort of loan guarantees (which much of the bailout money is) or actual cash infusion was necessary to prop up the system. Letting it collapse would have indeed created a National Bank.

As for Goldman... well... they all now work at the White House, so don't cry for Goldman.

I don't think anyone should cry for Goldman.

And of course I agree with you justbroke that if the banks had all collapsed then we would have had one very large ,very confused National Bank.

[justbroke]

AIG bailout was a must... mostly because AIG held many insurance policies, retirement accounts, and even equipment leases for municipalities across the country. I remember an interview (plea) from several big city mayors pleading that the Federal Government help AIG because all their transportation systems are owned by AIG on a leaseback. Would have wreaked havoc. I also concur that some sort of loan guarantees (which much of the bailout money is) or actual cash infusion was necessary to prop up the system. Letting it collapse would have indeed created a National Bank.

As for Goldman... well... they all now work at the White House, so don't cry for Goldman.

[backtoschool]

I don't think I ever disagreed with you, but here I do. The bail out was not "intrusion" into banking, which is what socialized or a "national bank" system is. The only thing that the former Administration did was authorize the Federal Reserve to print money and loan it to banks, with the intent to have it paid back. TARP wasn't even used the way it was "sold" to us as anyhow, so it's hard to call it an "intrusion" or socialized banking. That's my opinion of course.

Just imagine... the Bank of the United States being the name on all banks. Then you'd actually have socialized banking. The bailout of AIG was a totally different animal, and I don't equate it to traditional retail banking.

That's much different than a National Bank that takes over all the smaller banks. However, I will say that the current Administration is delving into areas that are more "controlling" the banks than lending to them. I call that intrusion where you tell a Bank that it can't make money by investing it's own money into areas that it wants to.

I totally see your point justbroke, but it is a matter of degrees. Citibank is partially owned by the government, so I think we would both agree that Citibank is a socialized bank. What really went down with TARP and what was communicated to the public by Paulson are two very different things. In reality, the government has been buying back mortgage securities at inflated, non-market prices, and allowing banks to keep artificial asset prices for their mortgage assets on their books. This may not be socialist banking per se, but it is not free-market banking either in my opinion.

Do I think that the banks all should have been allowed to fail in fall 2008, including Goldman Sachs?(who was bailed out by the government because the government bailed out AIG and AIG bailed out Goldman)? No. We would have had a financial crisis much much worse than the Great Depression in my opinion, and many people would have suffered. I think that we have a semi-socialized banking system right now, but I also think that that is a necessary evil right now.

[justbroke]

Government intervention in banking is also socialism. It was Bush's "socialism" that bailed out all of the banks and AIG. Is it still "socialism" when it is the banks that get the government assistance? Just curious.....

I don't think I ever disagreed with you, but here I do. The bail out was not "intrusion" into banking, which is what socialized or a "national bank" system is. The only thing that the former Administration did was authorize the Federal Reserve to print money and loan it to banks, with the intent to have it paid back. TARP wasn't even used the way it was "sold" to us as anyhow, so it's hard to call it an "intrusion" or socialized banking. That's my opinion of course.

Just imagine... the Bank of the United States being the name on all banks. Then you'd actually have socialized banking. The bailout of AIG was a totally different animal, and I don't equate it to traditional retail banking.

That's much different than a National Bank that takes over all the smaller banks. However, I will say that the current Administration is delving into areas that are more "controlling" the banks than lending to them. I call that intrusion where you tell a Bank that it can't make money by investing it's own money into areas that it wants to.