View Poll Results: Is Iceland an example of what we should have done?

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  • It would appear so.

    7 58.33%
  • Definitely not! (explain)

    1 8.33%
  • The two cannot be compared. (explain)

    2 16.67%
  • Bankers are not "banksters."

    1 8.33%
  • Is it about bankonomics or crime?

    2 16.67%
  • We have no input in the decision.

    2 16.67%
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Thread: "too Big to Fail," not

  1. #11
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    Re: "too Big to Fail," not

    Is Iceland an example of what we should have done?
    No, the two cannot be compared for many reasons. First off lets talk about the difference in scale. Iceland/US ~ 1/1000, 0.001, 0.1%. In other words Iceland's GDP is about half the size of our smallest State's GDP, which is Vermont at $26B, and is also about half the population of Vermont's with Iceland at ~320k and US at ~310M. The shear number of people effected by any trouble with the respective economies is so different you simply can't put them in the same box.

    Next, I don't know of anyone except Iceland that cares too much one way or the other about the value of the króna - and even they have good fall back currencies like the Euro and, of course, the ubiquitous American dollar. There are many perks that the US enjoys by having the base global currency, perks that we would lose if the dollar became really unstable for even a short time.

    The last difference is the national impact of having Citibank, Bank of America, or Chase shut down for even a day - and it would probably take more than a day for all the financial balls to stop bouncing to create a good cut-off. What happens to the small business that needs it's financial connection to make payroll? Or Mom&Pop who depend on one of those banks for their daily business? Or the private contractor? Or you and me? Which of us could actually do without making any financial transactions for a few days?

    I guess the bottom line is simple for me. If we had not allowed the investment banks to merge with the savings banks there wouldn't have been a problem. We could have let the investment banks fail and it wouldn't have had a huge impact on the economy. As it is, we're still living with this obviously flawed system - and we need to do something about that before it happens again. It's past time to get back to having separate investment banks and savings banks once again.
    Last edited by MoSurveyor; 08-24-12 at 01:35 PM.
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  2. #12
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    Re: "too Big to Fail," not

    Quote Originally Posted by DaveFagan View Post
    Iceland Was Right, We Were Wrong: The IMF - TheStreet


    What was Iceland's approach? To do the exact opposite of everything the bankers running our own economies told us to do. The bankers (naturally) told us that we needed to bail out the criminal Big Banks, at taxpayer expense (they were Too Big To Fail). Iceland gave the banksters nothing.

    Iceland Was Right, We Were Wrong: The IMF - TheStreet

    This article is an example of an economy doing exactly the opposite of the USA and achieving economic success.
    Does that inspire the "thinking cap."
    Perhaps banks are not "too big to fail."
    Banksters maybe should go to jail for re-education.
    Perhaps the inmates are running the asylum.
    Is it too late to alter course here in the USA?
    The government should not have bailed out the banks. The banks should have had to deal with the situation on their own. Some banks would have come back, others would have failed and been bought out by other more solid banks. A bottom would have been hit than we could have begun climbing back up. A bail out only gives us a parachute, we are still going down but it will take us longer to hit bottom and start to come back.

    I don’t think that banks or bankers are evil. There are only people. Some have devious intentions HO YES some do. But most of them are just people that are doing their job.
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  3. #13
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    Re: "too Big to Fail," not

    Quote Originally Posted by comedy4all View Post
    The government should not have bailed out the banks. The banks should have had to deal with the situation on their own. Some banks would have come back, others would have failed and been bought out by other more solid banks. A bottom would have been hit than we could have begun climbing back up. A bail out only gives us a parachute, we are still going down but it will take us longer to hit bottom and start to come back.
    unfortunately, it's not quite that simple.

    imagine these banks as colossal structures, miles high and acres thick. when those structures tumble, they take everything around them down, too. our choice at the time was to let them fall and destroy everything else so we could say, "welp, shouldn't have built her so high," or we could shore them up and take them down piece by piece.

    we shored them up, but we've done a piss poor job of bringing them down piece by piece. one would think that eventually we would decide that building miles high / acres thick structures might be a bad idea. this is why i argue that too big to fail is too big to exist.

  4. #14
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    Re: "too Big to Fail," not

    Quote Originally Posted by Helix View Post
    unfortunately, it's not quite that simple.

    imagine these banks as colossal structures, miles high and acres thick. when those structures tumble, they take everything around them down, too. our choice at the time was to let them fall and destroy everything else so we could say, "welp, shouldn't have built her so high," or we could shore them up and take them down piece by piece.

    we shored them up, but we've done a piss poor job of bringing them down piece by piece. one would think that eventually we would decide that building miles high / acres thick structures might be a bad idea. this is why i argue that too big to fail is too big to exist.
    Yours is an argument that I have heard before. To reply to your premise I will use the Oklahoma City bombing and the 9-11 tragedy (forgive me if you think that using these examples are out of order).

    On both occasions the buildings and the surrounding areas were hit hard. What you do is save what lives you can at the time (the banks that can should do what they have to stay solvent), let the dust settle (hit bottom), remove the destroyed buildings (some banks go bankrupt or get bought out), once the area is cleared start to rebuild (the banks that survived will pick up where those that died left off).

    It is a process that is painful but will show better results over time.
    COMEDY 4 ALL! it's a life Philosophy.

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  5. #15
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    Re: "too Big to Fail," not

    Quote Originally Posted by comedy4all View Post
    Yours is an argument that I have heard before. To reply to your premise I will use the Oklahoma City bombing and the 9-11 tragedy (forgive me if you think that using these examples are out of order).

    On both occasions the buildings and the surrounding areas were hit hard. What you do is save what lives you can at the time (the banks that can should do what they have to stay solvent), let the dust settle (hit bottom), remove the destroyed buildings (some banks go bankrupt or get bought out), once the area is cleared start to rebuild (the banks that survived will pick up where those that died left off).

    It is a process that is painful but will show better results over time.
    on 9/11, the uncontrolled collapse of the twin towers took out multiple nearby buildings. the collateral damage from the controlled collapse of our banking industry was both severe and global. the uncontrolled collapse would have been catastrophic.

    don't get me wrong, i hated the bailouts, and i still do. i argued passionately against them at the time. however, looking at it now, i have to argue that the controlled collapse was the least bad option. what really pisses me off is that we have done next to nothing to control the size of these institutions, so it's not a matter of if it will happen again, but a matter of when.

  6. #16
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    Re: "too Big to Fail," not

    Quote Originally Posted by Helix View Post
    on 9/11, the uncontrolled collapse of the twin towers took out multiple nearby buildings. the collateral damage from the controlled collapse of our banking industry was both severe and global. the uncontrolled collapse would have been catastrophic.

    don't get me wrong, i hated the bailouts, and i still do. i argued passionately against them at the time. however, looking at it now, i have to argue that the controlled collapse was the least bad option. what really pisses me off is that we have done next to nothing to control the size of these institutions, so it's not a matter of if it will happen again, but a matter of when.
    I believe that the best control of the size of these industries will be the open market. When the government gets involved it only makes things worse.
    Smaller banks usually give better rates and better service. Unfortunately a lot of regulations that are supposed to have rained in the big banks tend to hit the smaller ones much harder. If left alone people and businesses will start to move to the banks that will supply the lower rates and better customer service. This will cause competition that will spread out the business therefor keeping banks from getting too big.
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  7. #17
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    Re: "too Big to Fail," not

    Quote Originally Posted by comedy4all View Post
    I believe that the best control of the size of these industries will be the open market. When the government gets involved it only makes things worse.
    Smaller banks usually give better rates and better service. Unfortunately a lot of regulations that are supposed to have rained in the big banks tend to hit the smaller ones much harder. If left alone people and businesses will start to move to the banks that will supply the lower rates and better customer service. This will cause competition that will spread out the business therefor keeping banks from getting too big.
    i disagree. when there's not enough oversight, the market share the largest corporations grows larger as the market consolidates. in that case, you don't only have too big to fail banks, you have a few too big to fail superbanks; the equivalent of constructing the miles high / acres wide structure even taller and wider. after enough buildings fall and destroy everything around them, most cities enact building codes. we need to do the same nationally in relation corporate size and scope.

  8. #18
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    Re: "too Big to Fail," not

    Quote Originally Posted by Helix View Post
    i disagree. when there's not enough oversight, the market share the largest corporations grows larger as the market consolidates. in that case, you don't only have too big to fail banks, you have a few too big to fail superbanks; the equivalent of constructing the miles high / acres wide structure even taller and wider. after enough buildings fall and destroy everything around them, most cities enact building codes. we need to do the same nationally in relation corporate size and scope.
    I disagree. But that’s the good thing about forums; it gives you a place to find ideas that are different from your own.
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    Re: "too Big to Fail," not

    Quote Originally Posted by comedy4all View Post
    I disagree. But that’s the good thing about forums; it gives you a place to find ideas that are different from your own.
    i agree with this.

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    Re: "too Big to Fail," not

    Quote Originally Posted by MoSurveyor View Post
    No, the two cannot be compared for many reasons. First off lets talk about the difference in scale. Iceland/US ~ 1/1000, 0.001, 0.1%. In other words Iceland's GDP is about half the size of our smallest State's GDP, which is Vermont at $26B, and is also about half the population of Vermont's with Iceland at ~320k and US at ~310M. The shear number of people effected by any trouble with the respective economies is so different you simply can't put them in the same box.

    Next, I don't know of anyone except Iceland that cares too much one way or the other about the value of the króna - and even they have good fall back currencies like the Euro and, of course, the ubiquitous American dollar. There are many perks that the US enjoys by having the base global currency, perks that we would lose if the dollar became really unstable for even a short time.

    The last difference is the national impact of having Citibank, Bank of America, or Chase shut down for even a day - and it would probably take more than a day for all the financial balls to stop bouncing to create a good cut-off. What happens to the small business that needs it's financial connection to make payroll? Or Mom&Pop who depend on one of those banks for their daily business? Or the private contractor? Or you and me? Which of us could actually do without making any financial transactions for a few days?

    I guess the bottom line is simple for me. If we had not allowed the investment banks to merge with the savings banks there wouldn't have been a problem. We could have let the investment banks fail and it wouldn't have had a huge impact on the economy. As it is, we're still living with this obviously flawed system - and we need to do something about that before it happens again. It's past time to get back to having separate investment banks and savings banks once again.
    HOLY CRAP, I agree with Mo, i need a drink.

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