Republicans Find Voice in Opposing Stimulus: 'Oh, My God'

[w¡n9Nµ7 §£@¥€r 123]

They'll never fix 22

[mRx 16]

Another solution is simply to nationalize all the banks. I know it sounds bad, but there's

a strong case for keeping banks in permanent public ownership, since they cannot exist

safely without a deposit guarantee that is ultimately underwritten by the taxpayer. If

the government is going to take the "bad assets" off their balance sheets, then I'd rather

they took the good assets along with them. We're half way there with Citi and BoA.

I've read alot about the case to nationalize the banks and abolish the Fed, while relinquishing all it's market controls to the Treasury, which is supported by monetarists like M. Friedman.

Basically, we are going to take the control away from the greedy, money hungry, private banking wildcats, and give it to the good, honest politicians?

It's been tried with the Confederate dollar, and the Greenback, and the results are just the same as with the Fed.

The control is what needs to be taken away.

The way to solve banking is to go back to a gold standard; an actual real market gold standard. Not where some politician arbitrarily determines that one dollar is worth 1 ounce, as that would be fixing the exchange rate, and lead to the artificial overvaluation of the dollar, which in turn would supress exportation, and stimulate imports, as other currencies would appear undervalued to the dollar, but in reality they wouldn't be; just the dollar would be overvalued.

If we went back to a genuine gold standard, then inflation would be minimalized. Banks could, however, inflate; But, their would be checks and balances that would limit that.

- Banks (or gold warehouses) issuing receipts for gold (as was done while we were on the gold standard), would risk losing gold to other banks, because once the receipt makes it's way into the hands of someone of a different bank, that bank would redeem the receipt for gold, as a rival banks receipt is of no use to the other bank. This greatly limits a bank's ability to inflate, as the more they expand credit, the more likely it is for them to go bankrupt. (this and other free market limits on banking are explained in greater detail in the Economist Ludwig Von Mises' book, Human Action)

As it is now, banks are encouraged and downright coerced to lend up to their reserve limit (current fractional reserve rate is 10%) by the Federal Reserve. If under a gold standard, and they ran the risk of bankruptcy by not having the "lender of last resort" that is the Fed, then there would be absolutely no need to socialize deposit guarantees. All this FDIC ####### came as a result of the bank runs in the '20's. The Federal Reserve had inflated and essentially "overvalued" the dollar against gold, which, as I've said, stimulates importation. That led to a steady outflow of gold from America, as other countries, having no need for American dollars, redeemed in gold. The banks, watching their gold reserves diminish, tucked in their horns and contracted credit. The public, which was eventually tipped off to the banks' gold shortage, ran the banks, and the rest is history.

If the Fed never inflated the currency, encouraged member banks to inflate to their limits, or held the policy of not letting banks fail, then there wouldn't have been an artificial overvaluation of the dollar, an outflow of gold from the States, and a run on the banks.

So this FDIC policy, as I see it, is just a rubbish way of passing the consequences of failed inflationary policies to the US taxpayer.

Edited January 17, 2009 by Matt85

[mRx 16]

we forgot the lessons we should have learned back in the '80's, which is that unregulated capitalism will spiral out of control.

If you're referring to Reaganomics, I will agree, it failed utterly, and completely.

Reagan promised to:

• Drastically cut taxes and Federal Spending

• Free the market, both domestic and international

• Return the United States to a gold standard

On each count, Reagan failed.

• He created the highest deficit in history(up until that point, I'm sure Bush holds that's award now)

  and his government expenditures far exceeded those of that 'ol wild spender, Jimmy Carter.

• He did nothing to free the domestic market; in fact he bolstered existing regulation, especially on agriculture subsidies and price controls. On the international market, he was a protectionist to the core, denouncing the evil Japanese for "dumping" high-quality, low priced goods onto the American market. His administration was a big supporter of tariffs and quotas, in order to "bailout" these inefficient American firms, who can't compete in the import/export business.

• And finally, he quickly went back on his promise to return the US to a gold standard. His gold study commision was filled with inflationary, anti-gold bureaucrats, so it's not surprising.

The failures of Reagan were not as commonly thought, a failure of a free and unregulated economy; but rather the failure of a man to live up to his promises to provide us one.

I think of myself as more fiscally conservative (socially liberal)

Funny, that's kind of what I consider myself.

[Jasman0717 9]

"There was no Republican input at all involved in what House Democrats outlined today,"

Maybe that is a good thing

[DaveHanna 0]

"There was no Republican input at all involved in what House Democrats outlined today,"

Maybe that is a good thing

Like the 700b bailout bill, they will make some changes add billions more in pork and pass it.

[Jasman0717 9]

"There was no Republican input at all involved in what House Democrats outlined today,"

Maybe that is a good thing

Like the 700b bailout bill, they will make some changes add billions more in pork and pass it.

[Tahoma 2,292]

Ah yes...the good old days...before the FDIC...and when gold was king...when a man was a man...and when his bank went bust he just gritted his teeth, tightened up his belt, and started over from scratch. Yes, those were the days!

Advocacy by a few people of going back to the gold standard has been going on for generations. However, businesses back then did not act any more rationally than they do today. Risk and greed will always walk hand in hand. A few simple rules would have sufficed in order to prevent the latest economic collapse. As a result of deregulation of the financial markets, we now are stuck talking about massive bailouts and stimulus plans.

Are there some businesses that we believe should be classified as "too big to let fail"? Or, should we allow Darwinian economics to apply to all businesses regardless of size? Could we stand the pain that ensued from a Wall Street collapse? Would allowing Wall Street's collapse really lessen our risk of any future collapse?

[mRx 16]

If a certain bank had bad business practices, then the bank would be punished by the free market with loss of members and ultimately, if the practices were deplorable enough, bankruptcy. But the simultanous collapsing of banks, and the huge loss of wealth that was associated with it, was not caused by bad practices on the part of banks. I suggest reading up on exactly what caused the Great Depression.

FDIC is a joke. It transfers the risk from the banks to the taxpayer. If someone is not held accountable for their actions, what will keep him or her from making bad choices? Flawed regulatory attempts? I think not.

If you think de-regulation caused this current crisis, then you need to quit listening to the talking heads. It was the closing of the business cycle, and the bursting of the credit bubble; one which will soon be reflated by the "wise" politicians that ultimately led to this. There would be no business cycle, bubble, or recession if we were free of government intervention and monetary expansion. You can thank the Fed and Treasury for that.

[mawilson 2,133]

If a certain bank had bad business practices, then the bank would be punished by the free market with loss of members and ultimately, if the practices were deplorable enough, bankruptcy. But the simultanous collapsing of banks, and the huge loss of wealth that was associated with it, was not caused by bad practices on the part of banks.

But... then most banks would be punished and go out of business. Do you think the system

would survive the simultaneous loss of ALL the major banks?

Make no mistake - they would ALL go out of business. If you want to know which bank is

going to fail (aka "need a bailout") next, just take a look at their leverage ratios.

So.... who's going to collapse next, Bank of America or JP Morgan Chase?

My bets are on BoA.

[mRx 16]

If a certain bank had bad business practices, then the bank would be punished by the free market with loss of members and ultimately, if the practices were deplorable enough, bankruptcy. But the simultanous collapsing of banks, and the huge loss of wealth that was associated with it, was not caused by bad practices on the part of banks.

But... then most banks would be punished and go out of business. Do you think the system

would survive the simultaneous loss of ALL the major banks?

Make no mistake - they would ALL go out of business. If you want to know which bank is

going to fail (aka "need a bailout") next, just take a look at their leverage ratios.

So.... who's going to collapse next, Bank of America or JP Morgan Chase?

My bets are on BoA.

All these huge and successful banks were profitable in the past. The entrepreneurs of these institutions successfully invested in profitable prospects, which has allowed them to become so big, well known, and profitable.

So why now, are all the recent investments made by all these banks so financially damaging, when they were so successful in the past?

That's what I wondered. I understand about leverage, but it is the bank's financial advisors responsibility to balance the risk with the possible return, and they've done so successfully in the past, so why now are all these investments revealed as such greivous errors? Surely the banks realize their respective leverage ratios, and they must've been very sure of the profitable outcome, to risk more than their assets could cover.

My point is, that the leverage ratios only detail how their decisions have reacted in the market, not why they ultimately made the decisions to create for themselves such risky liabilities, because a liability in itself can be very profitable, as your thread on the accounting equation details.

The fact that all these previously successful banks made such grave malinvestments, can only be explained by the artificial credit created by the Fed in collusion with the government. The artificial credit must be liquidated, and the institutions which made bets against the credit expansions will suffer. Without the economy altering credit, these banks would have no need to be under such financial strain, therefore, you know which doorstep most of the blame can be laid.

[w¡n9Nµ7 §£@¥€r 123]

The fact that all these previously successful banks made such grave malinvestments, can only be explained by the artificial credit created by the Fed in collusion with the government.

People always forget about the extra terrestrials.

[Trumplestiltskin 5,791]

They'll never fix 22

I dunno - how much would it cost to add some drainage to the section of road just off the airport exit?

Its downright dangerous.

[w¡n9Nµ7 §£@¥€r 123]

They'll never fix 22

I dunno - how much would it cost to add some drainage to the section of road just off the airport exit?

Its downright dangerous.

22 eastbound gets noticeably worse the moment I enter Union county. I suspect there's some county-level culpability in all this.

If I were you I'd move slightly westward.