Simon Posted March 31, 2011 Share Posted March 31, 2011 from Reason Link to comment Share on other sites More sharing options...
TPS Posted March 31, 2011 Share Posted March 31, 2011 This reminds me of me... No, I was an SDS quasi-Marxist radical. Then as I went to Capitol Hill as a staffer, I began to see the virtues of the libertarian view, which isn’t that far, in some ways, from the radical left that I believed in as a student. Link to comment Share on other sites More sharing options...
GG Posted March 31, 2011 Share Posted March 31, 2011 from Reason This view is so naive, it's astounding: The only panic that occurred was in the Treasury Building and the Eccles Building [home to the Federal Reserve] in Washington. I don’t think there was panic on Main Street in America. The idea that the ATMs were going to shut down and the payrolls couldn’t be met—there is no factual basis to support that whatsoever. What was happening was that the big pyramids of debt on Wall Street were coming crashing down. Had we allowed nature to take its course, maybe the Goldman Sachs stock would have gone down to $10. But that’s their problem and that’s the problem of speculators who owned the stock, not a systemic problem for the economy. Maybe a couple of banks would have been closed by the FDIC, but whether you believe in deposit insurance or not—which I don’t—it was there, and that was the function of deposit insurance The reason that Treasury panicked is that they saw exactly what would happen when they let Lehman be the test case of a bank failing, and mind you Lehman was a minor player. Treasury need to stabilize the financial sector in the fall of 2008, otherwise it would have been much worse (and yes, people wouldn't be able to get cash out of the ATM, because the ATMs would have been empty). Amazing how some memories are short. I always love the Salomon & Blackstone alumni who deride crony capitalism. Link to comment Share on other sites More sharing options...
....lybob Posted March 31, 2011 Share Posted March 31, 2011 from Reason Good read Simon. GG I can see why you don't like it- it conflicts with your abstract matrix view of the world where we must forever summit to the big financial institution suicide bankers or they will blow themselves up and take us with them- of course the problem is the crisis isn't stopped it's merely postponed. The measures taken allowed for money to be redistributed from the poor and middle class to the financial class and allowed the same class time to get out dollar denominated paper and into tangible assets. The housing market isn't going revive any time soon, in fact it may go into another decline, eventually (nothing good happens to unoccupied real estate) institutions are going to have to realize market prices on housing assets and show losses, at that time the word insolvent is going to rear it's ugly head. Link to comment Share on other sites More sharing options...
Magox Posted March 31, 2011 Share Posted March 31, 2011 Good read Simon. GG I can see why you don't like it- it conflicts with your abstract matrix view of the world where we must forever summit to the big financial institution suicide bankers or they will blow themselves up and take us with them- of course the problem is the crisis isn't stopped it's merely postponed. The measures taken allowed for money to be redistributed from the poor and middle class to the financial class and allowed the same class time to get out dollar denominated paper and into tangible assets. The housing market isn't going revive any time soon, in fact it may go into another decline, eventually (nothing good happens to unoccupied real estate) institutions are going to have to realize market prices on housing assets and show losses, at that time the word insolvent is going to rear it's ugly head. I was against the bailouts, and I also happen to believe that they panicked, actually I'm pretty feckin certain that they did, they did indeed change the original intent of TARP of buying the "toxic assets" to recapitalizing them at the last moment..At the end of the day it was the FED's actions of the CPFF that was the main tangible stabilizing force that calmed the markets and prevented a future meltdown.. Anyone that has observed me knows that I am no fan of the Federal Reserve but I would say this was probably the bernankes best moment. Recapitalization of the banks wasn't the main driver in calming the markets, it was the liquidity provided by the FED to continue the natural flow of the commercial paper markets which is the heart of the banking system.. Without it there is nothing, everything dries up. Things come to a screeching halt, which is exactly what happened, no banks trusted another, they were uncertain of all the liabilities they may have had, and it appeared that there was no bottom in the prices of the assets they were holding. Which is why Paulson did a 180 on the original intent of TARP of buying the assets, simply because there would be little demand for those assets and the price that would have had to of been paid would of been much much larger than the $700B earmarked. It was the Fed who was the buyer of last resort of all this paper... All TARP did was give a psychological boost of the government backstopping the banks with the $700B which basically did nothing.. But when I read your description of how you perceive things bobby, Sarah Palin comes to mind. Except that you are PPP's flame throwing nimrod from the left. This isn't about "redistributing money from the poor and middle class" to the banks. Please, take the partisan crap out and save it for the suckas that buy into this phony B.S It's about the moral hazard that the Government has created in bailing out the banks when mainstreet is still suffering. Perception is everything, even though any RATIONAL person understands that in order to have a productive free flowing economy the banks MUST be healthy, the perception is that those "evil bankers" get bailed out, (in which they do) and that the rest of us are here stuck with crappy mortages are unable to get loans. So this moral hazard creates a loss of confidence from the public in governments ability to move forward more effectively. This does have a tangible negative impact. But its very difficult to quantify and recognize specifically how these impacts are felt. Some on this board are unable to see the impacts of TARP, and are only able to measure the success or failure of this program from within a box. Saying things such as "Well it did turn a profit". This is a very short-sighted way of measuring TARP's overall success... Link to comment Share on other sites More sharing options...
GG Posted March 31, 2011 Share Posted March 31, 2011 I was against the bailouts, and I also happen to believe that they panicked, actually I'm pretty feckin certain that they did, they did indeed change the original intent of TARP of buying the "toxic assets" to recapitalizing them at the last moment..At the end of the day it was the FED's actions of the CPFF that was the main tangible stabilizing force that calmed the markets and prevented a future meltdown.. Anyone that has observed me knows that I am no fan of the Federal Reserve but I would say this was probably the bernankes best moment. Of course they panicked, there was no alternative but to panic and throw every available resource at it, akin to throwing your gun at the tank. Call it the Dwight Drane moment. I also think that people get caught up in the acronyms too much and segregate whatever portion of TARP appropriation to support their views. Because TARP evolved into a more sprawling program, you can pick & choose your hero or devil out of the $700 billion. But the bottom line should be that Congress needed to approve the funding to the financial industry ASAP to restore confidence, stability & liquidity. It shouldn't matter that in midstream they realized that a portion of TARP should go to CPFF, because the initial fire they were fighting was the banks' capital, and then once they realized that wasn't as big of an issue, they moved to the next flash point - liquidity & funding. Since nothing of this magnitude has ever happened in the lives of nearly everyone involved, they were making it up on the go, and I'd say did a pretty good job of containing a disaster scenario. Link to comment Share on other sites More sharing options...
Rob's House Posted March 31, 2011 Share Posted March 31, 2011 That was deep. A bunch of big govt libs ripping Republicans for acting too much like them. I was particularly fond of the "Trojan Horse" line, where he "exposes" Reagan for really being out to drop the top tax bracket that was over 70% at the time. I guess we're supposed to be wringing our hands at the humanity of it all. wow. Link to comment Share on other sites More sharing options...
Magox Posted March 31, 2011 Share Posted March 31, 2011 (edited) That was deep. A bunch of big govt libs ripping Republicans for acting too much like them. I was particularly fond of the "Trojan Horse" line, where he "exposes" Reagan for really being out to drop the top tax bracket that was over 70% at the time. I guess we're supposed to be wringing our hands at the humanity of it all. wow. It appeared to me that his main criticism of Reagan was his defense spending and how he simply rubber stamped any funds requested from the Defense department. Then again, we were still in the COLD war era and he indeed did help expedite the Russian downfall, even though I do agree with Stockman's view that Russia's communist government was a big "house of cards" that was destined to fall. But lets be real here, Reagan's tough stance and Star Wars program did help quicken the process... If you look at Defense spending after the Cold War, it went down dramatically all the way through Clinton's presidency and one can make the argument that it had to do with the Cold War's end. Also Stockman I dont believe is a "big govt lib", actually he's quite the contrary, he's a super small goverment libertarian is how I view him. Doesn't mean i agree with everything he says, but he did make some valid points throughout the interview. Edited March 31, 2011 by Magox Link to comment Share on other sites More sharing options...
Rob's House Posted March 31, 2011 Share Posted March 31, 2011 (edited) It appeared to me that his main criticism of Reagan was his defense spending and how he simply rubber stamped any funds requested from the Defense department. Then again, we were still in the COLD war era and he indeed did help expedite the Russian downfall, even though I do agree with Stockman's view that Russia's communist government was a big "house of cards" that was destined to fall. But lets be real here, Reagan's tough stance and Star Wars program did help quicken the process... If you look at Defense spending after the Cold War, it went down dramatically all the way through Clinton's presidency and one can make the argument that it had to do with the Cold War's end. Also Stockman I dont believe is a "big govt lib", actually he's quite the contrary, he's a super small goverment libertarian is how I view him. Doesn't mean i agree with everything he says, but he did make some valid points throughout the interview. I was referring primarily to the author with that line. I don't know anything about either other than the article, just what I picked up by the jist of the intro. I have to correct myself. The interview itself is actually pretty good. The intro, not so much. Edited March 31, 2011 by Rob's House Link to comment Share on other sites More sharing options...
finknottle Posted April 1, 2011 Share Posted April 1, 2011 David Stockman is second only to Joe Biden in having staken his reputation on the wrong side of the biggest issues of his political career. Why is anyone even reading this? Link to comment Share on other sites More sharing options...
3rdnlng Posted April 1, 2011 Share Posted April 1, 2011 David Stockman is second only to Joe Biden in having staken his reputation on the wrong side of the biggest issues of his political career. Why is anyone even reading this? Throwing a little Dutch in there, eh? Link to comment Share on other sites More sharing options...
whateverdude Posted April 1, 2011 Share Posted April 1, 2011 Bottom line: THROW MONEY AT IT! tax more. It's like throwing gas on a fire. Lets first put the fire out (spending) then we can talk about the rest. Link to comment Share on other sites More sharing options...
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