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111 Comments
- notepaddotexe, on 04/28/2009, -4/+40...and chicks for free?
- MercyPolitics, on 04/27/2009, -5/+36Krugman goes after the Wall Street Banksters' culture with gusto. He doesn't think they really have changed. Most Americans getting scammed by banks and credit cards companies would agree with him.
- scottknick, on 04/27/2009, -4/+34FTA: At this point, however, it’s hard to think of any major recent financial innovations that actually aided society, as opposed to being new, improved ways to blow bubbles, evade regulations and implement de facto Ponzi schemes.
- ninjaturtles1, on 04/27/2009, -2/+21"There’s no longer any reason to believe that the wizards of Wall Street actually contribute anything positive to society"
So why would you bail them out!
"The last thing we need is to give them a chance to do it all over again."
But they did it's called the TARP! - homercles337, on 04/27/2009, -15/+29The Banksters have been working with the Repugs (yes, the Dems are also complicit, but 90% to one and 10% to the other) for years to rob the american people blind. The credit card industry is a perfect example. They deregulated to make it overly simple to lend, then they deregulated to make fines steep for defaulters, then they made it impossible for an average citizen to get out from under mountains of debt by declaring bankruptcy, then they deregulated privacy laws to make it easier for them to jack up interest rates when "odd activity" to one bank means notifying another--in an effort to squeeze blood from a turnip, then they collapsed because of their sheer greed and stupidity. In this day and age its better to get money from a loan shark--lower interest rates and broken legs heal. Before the right-wing attacks me as being credit risk, I would like to add that I say all this when my FICO score is 810. It would be higher but since my work directly benefits society my debt to income ratio is high.
- inactive, on 04/28/2009, -0/+14Well no ***** they are not going to change. ESPECIALLY when you reward them with billions of dollars of bailout money.
- inactive, on 04/28/2009, -1/+12There is a solution but most Americans want nothing to do with it: stop using credit for minor purchases. Quit bouncing balances around from card to card and learn to, God forbid, do without the new TV or bull bar for the super size me truck. Don't overdraw your bank account and leave as little in checking as possible. Put excess in savings with a higher interest rate. The bank will hate your accounts so much they might recommend a good credit union.
The response from both the left and right administrations was the same: "Get banks lending again". Translation: re-inflate the bubble. That's what you get when you put Wall Street bankers in charge of fixing a banking problem... A way to fix the problems the banks have, not the consumers. - ninjaturtles1, on 04/27/2009, -0/+10Why would they change? What's the incentive?
I don't understand why anyone would think they would do anything other than what they are currently doing...... - devans00, on 04/27/2009, -2/+10"Rightly or wrongly, the bankers seem to believe that a return to business as usual is just around the corner."
The idea that bankers can go back to business as usual (circa 2006) after the storm has passed, makes me sick to my stomach. Especially since many of their organizations wouldn't exist or be much smaller without infusions of cash from American Tax payers.
For all intents and purposes, they should be considered public institutions, required to share "profits" until every full nickel is paid back. Not cents on the dollars worth, either. - psients, on 04/28/2009, -2/+9Where do you get your 90 to 10 percent figure? Your bias? Both parties are bums, plain and simple.
- ninjaturtles1, on 04/27/2009, -2/+9I understand the too big to fail reasoning, I just don't agree with it! I think America would be better off letting these companies go bankrupt now, going through the short term pain and then start to recover!
Keep these businesses alive will prolong the recession and even turn it into a depression with hyper inflation of the dollar a real threat! - psients, on 04/28/2009, -2/+8No, it's not necessary to rescue Wall Street firms to protect the economy. Everything Krugman says after claiming otherwise is irrelevant.
- Narcism, on 04/28/2009, -0/+6Now that aint workin thats the way you do it
- BlacklabelSAR, on 04/28/2009, -1/+7It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
Henry Ford - CaptainPanda, on 04/28/2009, -0/+6You play the guitar on the mtv.
- PBRbeer, on 04/28/2009, -3/+8Buried for Krugman's twisted keynesian view of economics, wall street does not need to be rescued, Wall Street failed because they were given incentive by the government to take un-necessary risk with the promise of being bailed out with billions of federal reserve dollars. Over-Regulation and unfair Monopolization by the GSE (Government Sponsored Enterprises) is what got us into this mess, not the 7 figure salaries of wall street execs which amount to nothing more than a single needle of straw in the haystack when compared to the amount of capital in the marketplace.
Side Note: the title of this story 'Money For Nothing' would be much better suited to explain the situation of the Fed printing dollar bills. Rather than money spent to bailout wall street companies that continue operating as if nothing ever happened. - travelon77, on 04/27/2009, -2/+7Hear no evil, Speak no evil...that's what they wish we all would do. However, thankfully, we have people who are willing to speak strongly about these things. The only question that remains is do we have people who are willing to act strongly? Because they all seem to think we are just going to lay down and go back to sleep again and pretend like it was all a bad dream. Its time for a large scale cleanup in wall st. and washington.
- greenm1981, on 04/28/2009, -1/+6I would love to believe that the Dems had nothing to do with this, but that would require ignoring our very recent history. The Glass-Steagall Act, which provided a regulatory "firewall" between investment and commercial banks, was repealed in 1999 with the passage of the Graham-Leach-Bliley Act. Glass-Steagall was an important piece of legislation which emerged as a response to the financial instability of Wall Street during the Great Depression.
How did the Democrats vote on Graham-Leach-Bliley? 75% of House Dems and 83% of Senate Dems supported this deregulatory act. See for yourself: http://en.wikipedia.org/wiki/File:Gramm-Leach-Blil ...
Again, I wish the party that I'm registered with was perfect, but they're simply not. They're only responsive to their cash donors, which is why we need to record their behaviour and hold them accountable. Vote them out of office if necessary, even if it means putting in someone with no legislative experience at all. - rarson, on 04/28/2009, -4/+9You people talking about deregulation have no idea what you're talking about. The housing market collapse was caused by the insolvency of Fannie Mae and Freddie Mac. If you know what these companies are, then you know they were government-owned entities. Government regulations make fractional reserve lending possible, which incentivizes poor lending practices by shifting risk away from lenders. These ridiculous practices COULD NOT BE POSSIBLE without regulation!
Regulation of the lending industry doesn't make any sense anyway. If the regulators knew anything about lending, then they would be lenders, and not regulators. There is nothing magical about regulators that make them more able to control lenders than the market. - greenm1981, on 04/28/2009, -3/+7Too big to fail? Too big to exist.
- fandyllic, on 04/28/2009, -2/+6Bankers are the new lawyers.
I can bet most of the commenters above who talk about the financial industry needing less regulation and not more probably also believe in trickle-down economics, voted Republican (or Libertarian), hate all taxes, and ironically want to increase military spending which helps the economy the least.
The magical thinking that markets solve all problems astounds me. How many times will corrupt markets have to fail before hyper-capitalists will realize markets only work with transparent flow of information which doesn't happen most of the time and no one is doing anything to provide. Basic economics is not that hard, but you can't only get part of the equation working and expect all of it to work.
An intelligent analysis will mention the rating agencies major role in this debacle, but apparently the smart people aren't on this part of digg. - gn84, on 04/28/2009, -1/+5Too big to fail is BS. As long as bankruptcy proceedings are held in an orderly manner, and the banks have close to enough assets to cover their debts (and if they don't they should have been bankrupt ages ago), everything would be fine. Solvent businesses and legitimate creditors would gladly buy up the useful assets. Bad debt would be liquidated. It's called capitalism.
Do you really think your livelihood is directly dependent upon the survival of Citibank? - greenm1981, on 04/28/2009, -1/+4Agreed. A total boycott of all financial services provided by commercial banks is the only solution. Credit unions are charted with your interests in mind anyways, so it only makes sense to keep your money with them.
- regeya, on 04/28/2009, -0/+3"I understand the too big to fail reasoning, I just don't agree with it!"
o_O - gn84, on 04/28/2009, -0/+3@greenm1981
I'm curious, was the period from 1787 to 1934 a period of non-growth in the United States? Or is 150 years not a significant or desirable length of tenure?
Capitalism fails when a government (or quasi-government) institution can print money at will, stealing value (and capital), and wiping out debts (aka rewarding failure). - wissler, on 04/28/2009, -5/+8Buried for failing to identify the crux of the issue: the reason these big shots are paid so much for disastrous results is that no one owns the financial institutions anymore. Individuals are driven to get what they can and if they create a corpse of an institution, no one cares, they got rich. In the old days the bank owner wouldn't let such reckless behavior take place. Krugman is a total fool.
- MiddleAmerica, on 04/27/2009, -11/+14It was the right that wanted de-regulation so they could triple A-rate worthless investments, as well as leverage capitol to a 60-1 ratio, while overly inflating real estate prices.
All "money for nothing" that the right-wing wanted, which crashed the entire world economy.
The left had very little to do with this & are trying to clean up the mess. - shicken, on 04/28/2009, -0/+3Bahhh beat me to it.
- psients, on 04/28/2009, -0/+3One really ought to boycott the dollar and any paper currency, but sadly that's illegal to use anything other than Federal Reserve notes as currency -- even though the US Constitution explicitly says that no state shall, "make any Thing but gold and silver Coin a Tender in Payment of Debts."
Puzzling. - gn84, on 04/28/2009, -1/+4Funny, none of these recent financial innovations holds a candle to the Federal Reserve's ability to blow bubbles, evade regulations and implement de facto Ponzi schemes.
At least I can choose not to do business with Citibank, Chase, etc. If I attempt to do business without using Federal Reserve Notes, I go to prison.
Of course, Krugman would never mention such things... - ophello, on 04/28/2009, -0/+3Lemme tell ya, them guys ain't dumb.
- JoshReflek, on 04/28/2009, -0/+3"It’s necessary to rescue Wall Street to protect the economy"
who can honestly say this is true with a good explanation.
self preservation at the cost of yet higher unavoidable inflation tax....i h8 you. - Quisquis, on 04/28/2009, -0/+3Can't argue with that... I'd love to see a government filled with people who weren't politicians.
- ninjaturtles1, on 04/28/2009, -0/+3Exactly! Well said gn84!
- gn84, on 04/28/2009, -0/+3Everything Krugman says is irrelevant...
- psients, on 04/28/2009, -0/+3You know what the best way to clean them up is? Let them fail. After deregulating the whole mess, let stupidity run its course and be weeded out of the market.
That's the healthy thing to do. Not only is Krugman afraid of this, so are the people he criticizes. - gn84, on 04/29/2009, -0/+3@citizen782
Your argument makes no sense. Without the bad loans hidden inside, there would be nothing wrong (nor a need for) credit default swaps and other creative instruments. Those schemes enabled the financiers to hide the bad loans with good loans and sell them to investors. But without the bad loans, none of it would be necessary. - Logrusmage, on 04/28/2009, -2/+5THIS is why I was against the bailouts. A bunch of government run companies are far worse than a few gap years post-failure.
- boonesfarm, on 04/28/2009, -0/+2"Wall Street is no longer, in any real sense, part of the private sector". O RLY?
I was (tongue-in-cheek) making fun of Krugman because he, like many others, thinks he should have some input as to how much companies pay their CEOs. Very, very few "bankers" or "wizards of Wall Street" that Krugman wags his finger at have been recipients of TARP rescue. I don't care if American capitalism has an effect on our society that Paul Krugman approves of.
And your cute joke about Krugman indirectly receiving tax dollars? Your buddies at HuffPo have an idea http://www.huffingtonpost.com/sally-duros/how-to-s ... L3Cs - "programs that serve a social purpose each year"!!!!
Public money goes in, liberal content comes out. viola - statismisdead, on 04/28/2009, -1/+3Krugman is a supporter of central banking, you know the Federal Reserve which prints debt out of thin air and robs millions of Americans through inflation. The government takes half of people's income by force to the tune of trillions of dollars and people are focusing their anger at bank employees who got their contractually guaranteed bonuses? Krugman is not part of the solution he is part of the problem. Excess freedom wasn't the problem, the "federal" "reserve" was the root cause of this financial bubble causing easy credit by artificially manipulating interest rates. Anyone wanting to know the truth about how economics works would benefit by getting educated at mises.org
- Barackalypse, on 04/28/2009, -0/+2Apparently we can't, I must be doing something wrong if I get Dugg down for questioning our politicians. That, or there are a lot of big Government apologists on Digg.
- papasmurf12, on 04/28/2009, -0/+2How smart do you think you are?
Libertarians want to decrease military spending, and all wasteful government spending. They don't believe in trickle-down economics. They support regulation that encourages transparency (What group of people is pushing most to make the federal reserve transparent - Ever hear of HR1207)?
Libertarians understand that the private federal reserve and federal governement's economic policies are responsible for this downturn, and that more regulation would only be treating symptoms of the problem.
Why did the financial markets crash? Sure, it was in part due to deregulation, but is it not also the result of cheap money that encouraged tremendous greed and risk taking? We need a new system, but the answer is not fascism or socialism. - fandyllic, on 04/28/2009, -0/+2The moderate left lead by Larry Summers wanted de-regulation, but to say all the left wanted it is patently wrong, false and misleading. De-regulation has been driven by the right since the Reagan administration.
Credit default swaps, structured investment vehicles, and many other derivatives were created by the solid right-wing finance industry.
Stating lies does not make them true. - inactive, on 04/28/2009, -0/+2I had to bury your comment because not only did you miss the 20th century, during which there were almost no specific bank "owners", but your last sentence following such a rant makes you comical. You may not agree with him but I'll take your whole comment quite a bit more seriously when you post a pic with your Nobel prize for economics. This thin remark letting us know the "crux of the issue" ain't gonna get you there. But keep going. Sounds like your ideologies got it all figured out. Who needs numbers.
- gn84, on 04/28/2009, -1/+3So the NINA loans had nothing to do with the fact that the lenders knew they'd be bought by Fannie and Freddie, who are in turn backed by the "full faith and credit" of the government?
Or the fact that the Federal Reserve kept interest rates at near zero, creating extra incentive for lenders to take bigger risks? - jaxcs, on 04/28/2009, -1/+3Somehow some people continue to think that the current financial crises is caused by bad loans. Nothing could be furhter from the truth. If it were, simply guaranteeing the value of the homes would fix the economy but the problem is actually due to the bundling of bad loans into financial products. Worse, the softening of the housing market resulted in a general loss of value.
- greenm1981, on 04/28/2009, -1/+3If we stick to a bimetallic standard, capitalism would fail over time. This is due to the quantity theory of money. If the money supply can't expand output can't expand at a rate sufficient to satisfy the requirements of capitalist markets. They would then stagnate and accompany rising levels of unemployment. You just can't have a growing economy and gold standard over any significant or desirable length of tenure.
- gn84, on 04/28/2009, -0/+2Have you looked to see who the "right-wing finance industry" supported in the last presidential election?
This is Wall Street party A and Wall Street party B, with very few exceptions. Any suggestions to the contrary are completely ignorant. - geekee, on 04/28/2009, -0/+2"The left had very little to do with this & are trying to clean up the mess."
Are you a liar or just plain stupid? - gn84, on 04/28/2009, -0/+2Krugman isn't afraid, he's looking for more reasons to increase the power of government.
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