Google Says Break Up Companies Too Big To Fail

[Rizen]

Stop being a douche.

A total lose in paper money is far greater than most forms of inflation (minus hyper-inflation see: Germany after WW1, which is just slightly better). Of course it's going to affect the world economy, no one is debating that anywhere. The debate stems from which is worse: letting the US economy completely fail within a decade, or bailing out/nationalizing organizations and try to turn the situation around. Of course neither case is optimal, but this is where America is now.

And it is that way now because of unregulated, unethical, capitalistic free markets.

The debates in this thread vary all over the place. 100% capitalism is a theory that doesn't exist in reality, just like 100% socialism is. Neither can exist in a world filled with people who will act like people. Therefore, trying to position an economy too far to one side of a theoretical, impossible model is doomed for failure. Completely free market capitalism doesn't, nor can it ever, exist. And if you try to make it exist, you'll just shoot yourself in the foot over and over again.

First off, the entire economy wouldn't have failed in a decade.

Secondly, they have traded potential short term "relief" for long term devaluing of the dollar, inflation, and by dumping our debt onto the next generation. I don't think that is a wise compromise.

Third, "and it is that way now because of unregulated, unethical, capitalistic free markets" is complete bullshit. We do not have "unregulated free markets", we have poorly regulated "semi-free-ish in some industries markets". And bailing them out when they fuck up doesn't really set any good precedents for people to make responsible business decisions, does it?

 

[UrielDagda]

Here we go again.

I'll believe in total deregulation as a solution when the same people who think that's the whole solution start thinking that completely abolishing the criminal system and legalizing murder, rape, etc. would magically cease existing, just if we could only do away with those pesky laws against them! If we just didn't have a criminal system, people would be able to naturally police themselves!



I seems to be that that those who believe in a complete dismantling of all economic control, also seem to want the strictest, most draconian social controls on society.

I think that might be because there are people that want to grab as much money as they possibly can, any way they can get their hands on it, and want to be damn sure anybody that attempts to take it to be crucified for it.

It's like the rich are like two-year-olds that run around taking all of their sibling's belongings and when their parent confronts them, they scream "MINE" then throw a temper tantrum.

 

[UrielDagda]

First off, the entire economy wouldn't have failed in a decade.

Secondly, they have traded potential short term "relief" for long term devaluing of the dollar, inflation, and by dumping our debt onto the next generation. I don't think that is a wise compromise.

Third, "and it is that way now because of unregulated, unethical, capitalistic free markets" is complete bullshit. We do not have "unregulated free markets", we have poorly regulated "semi-free-ish in some industries markets". And bailing them out when they fuck up doesn't really set any good precedents for people to make responsible business decisions, does it?

The question is, then, how would they let these big entities fail, to teach those who fucked up a lesson, without fucking everybody that didn't have anything to do with the meltdown in the ass?

I just don't get how a big, global, mass assfucking is going to do anything to teach millionaires much of a lesson, since they'll be the ones that will be able to weather it the most (unless a global revolt of starving, newly impoverished people with flaming pitchforks run around skewering them).

 

[Briteball]

the government is to big to fail??? but it does? nobody comes along to to fix it, or break it up?

the simple fix to the whole thing is for the government to put people to work not fix the companies


we need new highways/bridges and telecommunication infrastructure water and drainage put the unemployed to work on these national problems

they did it once... they can do it again !!

 

[UrielDagda]

I'll take 100% capitalism over any percentage of socialism/communism any day.

Well start digging a hole to get water, and another hole to shit and piss in. And use heavily wooded dirt roads instead of the nice paved public road system.. Because all of those projects, such as sewage systems and public roads came from the Socialist party, which, back in the late 1800s and early 1900s, used to actually have a presence in US politics.

Oh, yeah, and then there is the publicly funded, police forces and fire houses.. So don't call the cops if somebody beats the shit out of you and takes your wallet, and get a nice big hose to put the fire out if your house ever catches fire.. Oh wait, no that would use the Socialist water system...

errr.. Lets face it.. Having a society requires a certain amount of practical socialism. To not accept this, will eventually cause the collapse of infrastructure we depend on every day to shit, piss, enforce law, keep people safe, and provide a way for modern commerce to exist, instead of having a country of loosely connected tribes scattered amongst the nation still shitting into holes shoveled out with sharpened rocks, bathing in streams, and trading half rotten fruit and poorly made garmets in town squares, while dying before age 40.

 

[Righty]

Well start digging a hole to get water, and another hole to shit and piss in. And use heavily wooded dirt roads instead of the nice paved public road system.. Because all of those projects, such as sewage systems and public roads came from the Socialist party, which, back in the late 1800s and early 1900s, used to actually have a presence in US politics.

Oh, yeah, and then there is the publicly funded, police forces and fire houses.. So don't call the cops if somebody beats the shit out of you and takes your wallet, and get a nice big hose to put the fire out if your house ever catches fire.. Oh wait, no that would use the Socialist water system...

errr.. Lets face it.. Having a society requires a certain amount of practical socialism. To not accept this, will eventually cause the collapse of infrastructure we depend on every day to shit, piss, enforce law, keep people safe, and provide a way for modern commerce to exist, instead of having a country of loosely connected tribes scattered amongst the nation still shitting into holes shoveled out with sharpened rocks, bathing in streams, and trading half rotten fruit and poorly made garmets in town squares, while dying before age 40.

So your saying that these things could NOT be taken care of in the private sector? I know it would take an effort that most people wouldn't care to bother with but its possible. To bad we will never find out.

Small towns all across the US seem to do OK with very limited socialism.

 

[Fendrix]

I'll believe in total deregulation as a solution when the same people who think that's the whole solution start thinking that completely abolishing the criminal system and legalizing murder, rape, etc. would magically cease existing, just if we could only do away with those pesky laws against them! If we just didn't have a criminal system, people would be able to naturally police themselves!

Oh, yeah, and then there is the publicly funded, police forces and fire houses.. So don't call the cops if somebody beats the shit out of you and takes your wallet

What?

A limited government does provide laws protecting people against violent and civil crimes, as well as providing public services. I don't recall everyone saying they wanted total anarchy, that's not the same thing as deregulation.

We just want the government to stay away from the private sector so the free market can reign.

 

[Guyverunit1]

What doesn't work is government interference in the markets plus lack of appropriate regulation.

Isn't that an oxymoron How do you have regulation with out government interference.

 

[KnishofDeath]

We just want the government to stay away from the private sector so the free market can reign.

Basically you want corporations to be able to do whatever they want? Sounds pretty darn dangerous to me.

 

[RussianHAXOR]

Im sorry, but... this was soapboxed from the beginning...

 

[UrielDagda]

What?

A limited government does provide laws protecting people against violent and civil crimes, as well as providing public services. I don't recall everyone saying they wanted total anarchy, that's not the same thing as deregulation.

We just want the government to stay away from the private sector so the free market can reign.

That's the point.. If we're going to have financial anarchy, why not have civil anarchy? If not, it's just no laws for the top 5% while enforcing laws to keep the other 95% in their place. That'll guarantee we keep the huge boom/devastating bust dichotomy going, never achieving any balance. I don't see why anybody would think that the government would stay away from the private sector when greed and lawlessness keeps bringing it to it's knees.

It's great to say "sure let these companies rise and fall" when they suck out as much money from the country as possible, then walk away and let it crumble, leaving everybody else to pay the price. Everybody but the people that perpetrate the bullshit seems to be the ones who pay. Just like right now.. Either the taxpayers pay and bail these banks out, or who the hell knows how many people pay if they are allowed to fail. We either shoot ourselves in the foot or in the head. Too bad their wasn't anything illegal with what they did. Pretty much every law that might have prevented it was stripped away in the last 30 years.

 

[UrielDagda]

Basically you want corporations to be able to do whatever they want? Sounds pretty darn dangerous to me.

I dunno, apparently the thinking is that, without regulations, corporations will suddenly grow a soul and operate in the best interests of everybody (and I am willing to bet that also means exempting them from any taxes.. you know, so they will create more jobs..).. But as soon as you impose any regulation or tax on them, they just turn into greedy sociopaths for some reason.

Umm.. or something.. lol

 

[Methadras]

What do you expect from a company that is politically oriented to the left. Google has always been leftist and the people it hires are the same way too. Does this really require a big fat DUH!!! These buffoons are in favor of Mussolini style fascism. Because that is what this government is advocating, which is exactly what Mussolini did. There is no such thing as being to big to fail, your size is irrelevant.

 

[Fendrix]

That's the point.. If we're going to have financial anarchy, why not have civil anarchy?

Because it's not the government's role to regulate the free market, as outlined by our Constitution.

... I don't even know why I bother talking about the Constitution, nobody seems to think it's relevant. I guess I just need to start embracing socialism like everyone else is, but somehow my American spirit won't let me.

 

[UrielDagda]

What do you expect from a company that is politically oriented to the left. Google has always been leftist and the people it hires are the same way too. Does this really require a big fat DUH!!! These buffoons are in favor of Mussolini style fascism. Because that is what this government is advocating, which is exactly what Mussolini did. There is no such thing as being to big to fail, your size is irrelevant.

This left=socialism=fascism=any other kind of hyperbole people come up with got old months ago. Now it's just starting to make people saying stuff that look like they don't know what the hell they are talking about.

Fascists can be economically right or left, because it's extreme social authoritarianism.

 

[BallerX]

You know I wish I could side with the people that believe federal regulation of everything is the way.
I have worked hard all my life and made good decisions about what I spend my money on. I just recently paid off my home. I couldn't give a shit what happens to the unprepared or the people who are dumb enough to sign balloon contracts. THEY SHOULD FAIL! AIG should fail. I guess I was taught by my parents that when you do stupid shit you should be prepared to get your ass run over. In fact, I am quite certain that even if I woke up tomorrow and the Dollar was so weak that I needed a wheel barrow full to buy a loaf of bread that my family would be fine. How you ask? Because I know how to make bread thats how. I don't honestly believe my life would change all that much. I might get to spend some more time with my family as I work the land that I own. I have skills that most people don't have. Skills that would allow me to take advantage of the situation and rise from the ashes of indentured servitude.

Why this country is freaking out.
Rich people don't know shit!
Do you realize what kinds of assets I could acquire from people who have more than they know what to do with but don't know how to power their home if the lights where to go out.
The decision makers in this country are scared shitless that the corruption based business models they have built will some crashing down and they won't be able to afford their vacation home, their high prices house keepers, their weekly happy endings, and all of that other bullshit that they think means something.
All they are doing anyway is postponing the inevitable. The actions being undertaken in this legislature are callus(NO ONE READ THE BAIL OUT BILL FFS). In my opinion it will only make the crash worse when it comes. I say bring it on motherfuckers. I'll be fine. I own actual resources. Not some make believe number that changes everyday, but real tangible things like land, shelter, materials and livestock and don't forget the bullets. I am liquid. Just imagine the position the Paris Hiltons of this country will be in if their precious green backs suddenly become worthless. You won't have to imagine because we have all seen the tape. Those bitches will be in an alley sucking dick for breakfast.
I tend to like the idea of getting by with hard work and common sense. Not getting by because I know people.

It's called redistribution of wealth and this country is terrified of it. Do you actually think that if GM went out of business that other opportunities wouldn't be created for persons with morals who can actually build a decent car might step in and get some of that business. It's time to turn the compost pile so that transitions that are essential to our type of government are allowed to take place.

VIVA LA REVOLUTION!

 

[UrielDagda]

VIVA LA REVOLUTION!

Don't bet on it.. If anything, if it all collapses, the middle class will lose everything, the poor will revolt, and the rich would just make the old middle class their bitches, and use them as a hired army to protect them from being lynched. And while all this was going on, China would send a half a billion troops over and in a few years the survivors will be speaking Chinese.

 

[MsB]

And all the while, while the media has your eyes on the AIG and Madoffs and the Wallstreeters Congress has just passed the Give Act. I suggest you read it. It isnt about vounteerism its about forced slavery and check out amendment 12 of this nifty little piece of legislation while your at it. It says no one is allowed to protest it or basically effect your first ammendment rights to voice oposissition to it once it clears the senate. and the senate has passed a similar bill. And btw, Abolish the fed, go back to having the treasury issue currency as the constituion states, abolish federal income taxes which make up only a small portion of this countries income,and let them all fail!!!. It will be hard for about a year but the economy will snap back. Failed companies will get bought up. No taxes will really help stimulate and we will get thru this in no time. Theis administration is carrying on the same failed policies of the previous one and all its going to do is cause us to have a depression lasting 15 years and become a third world socialist state where everyone works for the Government. Gee sounds a lot like China, eh Once this administration gets its 1,000,000 man civil army and all the corps like monsanto get control of all the food which another bill HR 875 will accomplish then you may as well bend over and kiss that poket constituion in your back pocket goodbye. I get so sick of listening to all the mindless obamites clatter in the forums and people that listen to the main stream media and think they are getting something of real value. A quick suggestion. Listen to what a real economist has to say, one that predicted all this crap ten, twenty years ago. Ron Paul.

 

[UrielDagda]

And all the while, while the media has your eyes on the AIG and Madoffs and the Wallstreeters Congress has just passed the Give Act. I suggest you read it. It isnt about vounteerism its about forced slavery and check out amendment 12 of this nifty little piece of legislation while your at it. It says no one is allowed to protest it or basically effect your first ammendment rights to voice oposissition to it once it clears the senate. and the senate has passed a similar bill. And btw, Abolish the fed, go back to having the treasury issue currency as the constituion states, abolish federal income taxes which make up only a small portion of this countries income,and let them all fail!!!. It will be hard for about a year but the economy will snap back. Failed companies will get bought up. No taxes will really help stimulate and we will get thru this in no time. Theis administration is carrying on the same failed policies of the previous one and all its going to do is cause us to have a depression lasting 15 years and become a third world socialist state where everyone works for the Government. Gee sounds a lot like China, eh Once this administration gets its 1,000,000 man civil army and all the corps like monsanto get control of all the food which another bill HR 875 will accomplish then you may as well bend over and kiss that poket constituion in your back pocket goodbye. I get so sick of listening to all the mindless obamites clatter in the forums and people that listen to the main stream media and think they are getting something of real value. A quick suggestion. Listen to what a real economist has to say, one that predicted all this crap ten, twenty years ago. Ron Paul.

What? It just seems to be a bill that amends and makes some updates to a 1990 bill.. I don't see an "amendment 12".

Have you ever heard of paragraphs? The rest of your post is just gibberish to me.

 

[eeyrjmr]

Don't bet on it.. If anything, if it all collapses, the middle class will lose everything, the poor will revolt, and the rich would just make the old middle class their bitches, and use them as a hired army to protect them from being lynched. And while all this was going on, China would send a half a billion troops over and in a few years the survivors will be speaking Chinese.

If there is hope, it lies in the proles

 

[stueyG]

There does seem to be this strange assumption here that companies (which as entities exist ONLY to make a profit for their shareholders) are in some way alturistic entities.

No regulation in the free market needs to be viewed in the context of its time - an America with no "big" companies.

Anyway - point in hand, a lack of regulation has lead to the spectacular screw-up's that have been seen recently, where huge companies (AIG being the poster child) have been allowed to gamble hundreds of billions of dollars on the future of the housing market, given credit to people who they knew could not repay it and in doing so threatened to return us to the 15 years of misery seen in the 1930's. Regardless of how you feel ideologically about free markets, it seems clear (to me at least) that simple greed does not make a particularly good regulator.

 

[Brantoc]

Why is it, that someone who has profited so much from a capitalist system would prefer to live in a socialist system?

History is not a very good teacher or you just have not learned.

 

[zoulias]

I sometimes wonder if people actually believe the tripe they post on the internet.

A total confidence loss in US paper money? Yeah because dumping several trillion dollars of US currency into circulation out of thin air isn't going to do anything to the value of the US dollar internationally, right? A 10+ trillion dollar debt either?

Jesus Christ, stop posting.

wow, just wow - I can say the same for you.

I work in the financial sector and suspect even my small amount of knowledge on the subject eclipses your understanding by miles. If you witnessed the effect of the Lehman Brothers fall out, and then let merril, Goldmans, AIG, Lloyds, HSBC, HBOS all faile, which they would have in a chain reaction - what you would witness is an apocalpse. Bye bye everyones savings, countless loan deals, countless companies going into administration, mass loss of jobs, worldwide. You havent even witnessed the type of depression where people carry money in wheelbarrows, and those depressions of the past would be nothing compared to what could happen.

And to think you then think quantitative easing, in a deflationary environment, is the problem. Just wow.

 

[eeyrjmr]

wow, just wow - I can say the same for you.

I work in the financial sector and suspect even my small amount of knowledge on the subject eclipses your understanding by miles. If you witnessed the effect of the Lehman Brothers fall out, and then let merril, Goldmans, AIG, Lloyds, HSBC, HBOS all faile, which they would have in a chain reaction - what you would witness is an apocalpse. Bye bye everyones savings, countless loan deals, countless companies going into administration, mass loss of jobs, worldwide. You havent even witnessed the type of depression where people carry money in wheelbarrows, and those depressions of the past would be nothing compared to what could happen.

And to think you then think quantitative easing, in a deflationary environment, is the problem. Just wow.

exactly!
A run on the banks + deflation would not be a pretty mix and the problem is it would ripple throughout the world and everyone would suffer meaning a recovery would take longer (not to mention martial law would probably have to get called)

"printing money" is the only way, sure it is going to cause problems in the future, but at least the future would somewhat resemble the here and now.


AIG should not have been allowed to make such great risks! gov'n legislation and involvement are going to be needed in the future across all industries

Look at the automotive industry. If ford was allowed to go under (which it on the verge of) how many people would be made unemployed, unemployement is a massive stain on an ecomomy, so is loss of skills and infrastructure (once you lose some manu it is very hard to get it back - look at the UK, it can happen to any country)

I am going to mention Microsoft (please MS fanboi's don't turn this into a linux vs MS...) since they are also a good example.
MS are big, they have >90% of the desktop market and a significant percentage of the server market.
IF MS suddenly went under and vanished how could new PC's get authenticated, how would vulnerablities get fixed.

IF MS did cave under alot would suffer. (no I am not asking for MS to be split up, at this stage )

 

[oROEchimaru]

we are not going socialist... we have none of the benefits of a socialist government... only the high taxes.

we are more like a republican country, with democratic taxes. very little services for the average person...unless your extremely wealthy or a shiesty addict.

 

[eeyrjmr]

we are not going socialist... we have none of the benefits of a socialist government... only the high taxes.

we are more like a republican country, with democratic taxes. very little services for the average person...unless your extremely wealthy or a shiesty addict.

going doesn't mean end result is a 100% socialist system
going just means incorporating some of the principles

a 100% capitalistic system fails in practice
a 100% communist system fails in practice
a 100% socialist system fails in practice

and while a VASTLY capaitalistic system is for the greater good, it needs to incorporate some socialist idea's to ensure the system continues to run

 

[eeyrjmr]

think of it like back in the British empire
We using to pillage cities after we sacked them, take as much as we could

We really started to expand once we realised that if we actually estabilished ourselved somewhere we could control supply&demand to make alot more £££ more regually (East Indian Company)

 

[trooper11]

"printing money" is the only way, sure it is going to cause problems in the future, but at least the future would somewhat resemble the here and now.


AIG should not have been allowed to make such great risks! gov'n legislation and involvement are going to be needed in the future across all industries

These statements scare me. I cant believe people would be so willing for the government to come and control whatever company they deem neccesary. The governement was never meant to have that kind of power. How can anyone trust our governement to run companies when they cant even run themselves efficiently or ethically. If anything, the government is the poster child for a poorly run company. We are continually 'bailing' out the government for its mistakes in the form of taxes, etc. Look at programs like social security and tell me I should trust in the governernment to know whats best for me or companies I might work for or be invested in. Government can regulate thes companies without owning them and without putting limits on success, they just want to take this oppurtunity to grab power while everyone's anger has been directed to the private sector only when we should be angry with our leaders in Washington every bit as much.


Capitalism is what drives this country ahead of all the other countries around the world. Yes, there has to be rules and regulations to keep those that would take advantage of the system, from doing so. But the level of regulation is up for debate. Why arent we questioning why the regulations we have werent enforced and why governement officials arent being held accountable for that? I see people say this was caused by a lack of regulation and yet there are pages after pages of regulation that would have held things in check if they were simply enforced. Dont try to tell me the government isnt just as guilty as the private sector for the failures here.

 

[Ibanezfoo]

Amazing how this country is moving to Communism. My Russian friend tells me the worst mistake he ever made was coming here. He thought he was escaping the communist regime and believed in the dream of America, but it turns out we are just the same, if not worse.

 

[Nemesis999]

Yeah, I'm sure millions of people who had no hand in this meltdown wouldn't mind becoming homeless and slowly starving to death to test out that theory.

Lets hope that this time we can get regulation in place that isn't eventually chipped away and torn down.

This is the type of delusion that makes these idiots actually believe that there is something that is too big to fail.

What happens to all the customers of these companies? Do they cease to exist? Do their assets just disappear? Maybe we should throw it all in an incinerator.

Oh, wait, they go bankrupt, and all their competitors thrive in the surge of business. That is the ENTIRE point of capitalism. The weak fail and the strong flourish.

 

[Chiplg]

Welcome to the USSA.

 

[Ibanezfoo]

wow, just wow - I can say the same for you.

I work in the financial sector and suspect even my small amount of knowledge on the subject eclipses your understanding by miles. If you witnessed the effect of the Lehman Brothers fall out, and then let merril, Goldmans, AIG, Lloyds, HSBC, HBOS all faile, which they would have in a chain reaction - what you would witness is an apocalpse. Bye bye everyones savings, countless loan deals, countless companies going into administration, mass loss of jobs, worldwide. You havent even witnessed the type of depression where people carry money in wheelbarrows, and those depressions of the past would be nothing compared to what could happen.

And to think you then think quantitative easing, in a deflationary environment, is the problem. Just wow.

Can I borrow your crystal ball for awhile? Its humorous how people seem to think they can predict the future.

You know what? I would welcome all that doom and gloom you speak of. Because then we can rebuild it, hopefully better this time.... rather than all this ridiculous patchwork and handing control to the government.

 

[trooper11]

This is the type of delusion that makes these idiots actually believe that there is something that is too big to fail.

What happens to all the customers of these companies? Do they cease to exist? Do their assets just disappear? Maybe we should throw it all in an incinerator.

Oh, wait, they go bankrupt, and all their competitors thrive in the surge of business. That is the ENTIRE point of capitalism. The weak fail and the strong flourish.

Thats a good point. We always see a competitor or a new company come up from the ashes of a bankruptcy of one company to provide what the people want. The only way that wouldnt happen is either there wasnt really a market for the service/product or something like governement intervention makes it undesireable to even try.

 

[eeyrjmr]

This is the type of delusion that makes these idiots actually believe that there is something that is too big to fail.

What happens to all the customers of these companies? Do they cease to exist? Do their assets just disappear? Maybe we should throw it all in an incinerator.

Oh, wait, they go bankrupt, and all their competitors thrive in the surge of business. That is the ENTIRE point of capitalism. The weak fail and the strong flourish.

That is true, but look at the present situation the competitor of AIG is? other banks and fuck me they are also vulnerable
Dominoes

 

[trooper11]

That is true, but look at the present situation the competitor of AIG is? other banks and fuck me they are also vulnerable
Dominoes

thats true, but I just find it hard to accept that the only way to turn this around is by giving companies to the governement to run. the government doesnt give up power normally, so its hard to see this precedent ending well for the economy.

even if all competitors are in the same boat becuase of mismanagement and failures in the government, a new company could develop that starts on solid ground and takes on the services neccesary, but its hard to say considering the climate now that another company would want to be in the market

 

[eeyrjmr]

thats true, but I just find it hard to accept that the only way to turn this around is by giving companies to the governement to run. the government doesnt give up power normally, so its hard to see this precedent ending well for the economy.

even if all competitors are in the same boat becuase of mismanagement and failures in the government, a new company could develop that starts on solid ground and takes on the services neccesary, but its hard to say considering the climate now that another company would want to be in the market

and that is the main problem in this present climate. Thus the only one that can step in is the gov'n

Take the car industry as another example (since it is the next industry on the verge) if ford is about to collapse what about all the jobs? the only way some/most/all the jobs are to be saved is if a private enterprise steps in to buy BUT since ford is fairly big it would be quite a risk for another company to step in to take up its debt and present mangement structure

Again leaving only the gov'n who has a vested interest in the econ as a whole and not to a small group of people (read shareholders/board).

Like it or not the bigger a company gets the smaller the pool of people/corps that can step in to take over IF it is such a critical company. be it due to the reprocussions of collapse [AIG] or due to additional strain on the wider econ [Ford].

These are extreme times and extreme times call for extreme action. Had such a gov'n takeover happened during say a peak of a boom then yes all concerns are valid and would not be justified. BUT during severe ecenomic downturn on a global scale only a countries gov'n exist to try to soften the blow and limit the fallout

 

[Nemesis999]

That is true, but look at the present situation the competitor of AIG is? other banks and fuck me they are also vulnerable
Dominoes

Except AIG failing doesn't hurt their competition, it helps them.

Where do you think all AIG's customers go if AIG fails? There are millions of people that pay for their services. Think it's going to hurt everyone else when they suddenly have millions of people looking for a new service provider? Even if you are going to help failing corporations, you should never help the first couple. Set up a system to supports the 95% that are in good shape aside from a few billion in bad assets, you don't drop hundreds of billions of dollars on a worthless steaming pile like AIG. What matters is confidence in the system, not confidence in one company. Had the government used those hundreds of billions to fortify the FDIC instead and up the limit to $500,000 or even $1,000,000 it would do a hell of a lot more to restore confidence then keeping a crippled and dangerous company above water at the expense of the taxpayers.

Those people that AIG owes money to? It would be less expensive for the government to simply pay their debts, they'd still have money to flood the FDIC with cash. All they have done is introduce a HUGE moral hazard. They've essentially said "If you take a huge risk and fail, don't worry, we'll take someone else's money and give it to you.". Now they've come up with the bright idea of loaning out money so companies can buy bad assets. Great idea, now you have people who get the reward of their risky investments, but the government will shoulder some of the losses. Who is inflating the value of assets now?

A recession is, by definition, when the businesses are hurting. You don't fix this by taxing the hell out of them. The government is flat-out HORRIBLE with money. They always have been. That is the very reason that the government is separated from the businesses. Putting money in the hands of the government makes it non-productive. You fix a recession by making the companies more profitable and improving investor's confidence. There is a mind-numbingly simple solution for this, they're called tax-cuts. You stop taking money from the producers. It's that simple. If you want to go a step farther you throw in new infrastructure, which is a great investment. As much as we all like to give our money to people who failed economic natural selection, they DON'T HELP THE ECONOMY. Money in the hands of non-producers is exactly that, non-productive.

People are under this delusion that the "rich" (apparently households with over 250k income) people like to make nice piles of money under their beds. The reality is that the people with excess money are the ones that invest it in the economy. Putting more money in the hands of the Walmart shoppers to horde as long as they possibly can just makes things worse.

People like to complain that the rich take and take and never give anything back. They're under this idiotic delusion that companies "take" wealth from others. Companies CREATE wealth. 99% of the wealth in the world is a result of business. The evil rich people (the ones that are actually rich) are the ones that create jobs. P.S. Before someone starts debating whether trickle-down economics actually works, I would suggest you look up this small group of people called the MIDDLE CLASS. Ya know, the hundreds of millions of people around the world that work for these evil money-hoarding people that have never given anything back. Oh wait, you're entitled to be middle class, lets demand the businesses do more!

The fact is that the people who are bitching about the businesses are the greedy ones. The ones that became wealthy by creating that new wealth deserve every penny of it, they already pay 90% of the taxes and 95% of the salaries, now the greedy masses want to steal more of their money because they didn't bother saving for bad times?

Anyway - point in hand, a lack of regulation has lead to the spectacular screw-up's that have been seen recently, where huge companies (AIG being the poster child) have been allowed to gamble hundreds of billions of dollars on the future of the housing market, given credit to people who they knew could not repay it and in doing so threatened to return us to the 15 years of misery seen in the 1930's. Regardless of how you feel ideologically about free markets, it seems clear (to me at least) that simple greed does not make a particularly good regulator.

That is 100% FALSE. This is the result of over-regulation.

Look up the Community Re-investment Act. It's a federal law that FORCES lenders to operate in areas that they have previously avoided as poor/risky. (Oh look, the government was wrong and the businesses were right). With Clinton strengthening it in 1994 the lenders were in a "lend-or-be-sued" situation. As a result all these lenders began packaging these loans and selling them because they sure as hell didn't want a huge pile of risky debt. This blame for this situation falls directly on the government. They are the ones that forced a huge amount of toxic debt to be created.

 

[Nemesis999]

and that is the main problem in this present climate. Thus the only one that can step in is the gov'n

Take the car industry as another example (since it is the next industry on the verge) if ford is about to collapse what about all the jobs? the only way some/most/all the jobs are to be saved is if a private enterprise steps in to buy BUT since ford is fairly big it would be quite a risk for another company to step in to take up its debt and present mangement structure

If only there were some kind of bankruptcy process that this business could go through that would allow it to reorganize itself into a profitable venture that would appeal to private equity investors...

Bankruptcy exists for a reason. If a company cannot either turn itself around in bankruptcy, or present a front that would make it worthy of investment, then why should it be maintained? If private investors aren't willing to invest (P.S. The people that got filthy rich making the RIGHT calls on business) why should the government (P.S. The people that are know for making the WRONG calls on business) do it? Private investors are usually right. If no one is willing to pick up the company the odds of it ever being profitable again are slim to none.

Again leaving only the gov'n who has a vested interest in the econ as a whole and not to a small group of people (read shareholders/board).

The government has a vested interest in themselves. Their goal is to satisfy their constituents who, for the most part, have no fucking clue what is best. This is, not surprisingly, why they're not the ones with the money. The government fucks the economy over and over and over in order to keep themselves in power.

Like it or not the bigger a company gets the smaller the pool of people/corps that can step in to take over IF it is such a critical company. be it due to the reprocussions of collapse [AIG] or due to additional strain on the wider econ [Ford].

Chrysler? GM? Ever wonder if maybe the fact that you can't support 3 car companies is a sign that you shouldn't? Why bail out an entire sector when allowing one to fail and be absorbed would have the same effect? If they can restructure to be profitable, it's a win. If they can't their competition experiences a HUGE surge in demand for their American cars.

These are extreme times and extreme times call for extreme action. Had such a gov'n takeover happened during say a peak of a boom then yes all concerns are valid and would not be justified. BUT during severe ecenomic downturn on a global scale only a countries gov'n exist to try to soften the blow and limit the fallout

They really really really aren't. The horrible mismanagement of the economy recently is what has created this problem, not "extreme times". Every single choice in business is risk vs reward. Taxes cut down rewards and leave risks untouched. As a result fewer choices are judged to be "worth it" and are subsequently discarded. These discarded investment opportunities is precisely what hurts the economy. Combine that with the doomsday prophet declaring the end of the world (despite numbers are the time being better then the 80's recession) and suddenly everyone sees inflated risks, causing even fewer investments. Lets top that all off with a plan to spend the country tens of trillions of dollars into debt. Hmmm, how will that be solved... Oh, taxes! Guess what? The executives aren't stupid. They know high taxes are coming. There goes another batch of investments that will never be made...

There are 2 things that make this situation. The "extreme" stupidity of President Chimp and President Teleprompter and the "extreme" destruction of the economy by over-regulation and taxation.

 

[Mav451]

There are 2 things that make this situation. The "extreme" stupidity of President Chimp and President Teleprompter and the "extreme" destruction of the economy by over-regulation and taxation.

I could deal with your partisan rhetoric, but this is a bit much, don't you think?

 

[Nemesis999]

I could deal with your partisan rhetoric, but this is a bit much, don't you think?

Huh? Unless you're assuming that I'm referring to Obama twice and therefor am being racists, I don't see what's wrong with this statement. Bush gets called a chimp all the time, mainly because he looks like one. (P.S. I love how we're allowed to call Bush a chimp but it's instantly racism when you call Obama a chimp.) The current and the previous presidents have been horrible. The only question to be seen is which is worse.