Posted by: Rob | February 19, 2009

Government Running the Banks?

A recent post on Kurt’s blog was a brief excerpt from this article discussing US government edicts to the banks and investment firms on the receiving end of government bail out money under the TARP.

Kurt is a self-identified libertarian, although many of his views lean towards the right wing and republicanism. Although I used to have many similar positions in my younger days, experience and events have somewhat shifted my views on the “way things should be”.

I read the linked article and, while I do have definite socialist leanings nowadays, I am appalled at recent steps taken by the US government to “save” the economy, if not the country.*

In response, I left the following comment on Kurt’s blog:**

As usual, the topic is far too broad and incestuous to have any kind of reasonable discussion.

As to the treatise of the linked paper?

“Why the government should not tell banks how to run their businesses.”

I don’t know if it’s the libertarian viewpoint or not, but the US government should not have given a single penny to any of the banks.

Regulation doesn’t work (the crooks find ways around it) and de-regulation doesn’t work (the crooks run amok).

The banks should have been allowed to fail. The ultimate in first hand learning.

The only thing the US government should have done was to sponsor forensic investigations to find the criminals responsible for the fiasco and file charges against them. Not only should these criminals be subject to (hard) prison time, but they should be stripped of all their material assets and wealth which would then go toward restitution to those wronged by their criminal actions.

What? Too far? Too draconian?

From where I sit, the clowns on Wall Street have learned only one thing: They can get away with it.

Well fuck them. They deserve to rot in hell.

*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *  

 

* It’s really more about preserving a “way of life” that, in my opinion, is predicated upon principles that no longer apply. Again, in my opinion.

** I try, I mean I really try, not to rant on someone else’s blog. I am not always successful at self-restraint.

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Responses

  1. I’m with you, pal. I try to stay away from TARP discussions with my friends in the financial sector because it only results in the temporary suspension of our friendship.

    I was the recipient of one of your rants once and found it refreshing and thoughtful. Not to encourage you…

  2. The issues surrounding ‘the banking sector’ are complex and are not suited to a binary let live or die decision, regardless of one’s politics. It is most certainly better for all of us if big banks do not fail, look at what happened after Lehmans. That they are insolvent will take time to address. At the rate we are going, we will all be insolvent by next year so it won’t really matter much!

    Welcome beaverboosh. Thanks for stopping by and commenting!

    The interesting thing about the Lehman’s failure (or so I’ve heard) is that it was allowed to fail because much of it’s paper was held by Venezuela and there was no love lost between GW Bush and Hugo Chavez. The rest were “saved” because much of their paper is held by China and the Bush administration wanted to be sure to preserve that relationship.

    You are right though; the issues are very complex. The trouble is the economic “crisis” is only one indicator of a much larger problem facing the world’s population opposite our current way of living.

  3. My take is that it was either Lehmans or Morgan Stanley, Lehmans was first past the post (the Venezuela holding was a drop in the ocean). Both the Fed and Treasury fucked up underestimating the imapact on the money markets and the commercial paper market, not to mention the credit default swap losses and the overall knock to confidence in the American banking system… and they surely must chalk this up as a monumental fuck up versus say a more ‘systematic and controlled’ failure.

    You are too right! We are witnessing a sytematic ‘consumer’ de-leveraging that was more than 25 years in the making.


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