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"too Big to Fail," not

Is Iceland an example of what we should have done?


  • Total voters
    10
  • Poll closed .

DaveFagan

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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?
 
Iceland NATIONALIZED the banks, froze their assets and basically took over the economy ...
 
...and the scale of the U.S. economy and the Icelandic economy cannot really be compared. I'm not saying that TBTF is a good policy, I'm saying that I don't understand enough about the world economic situation to seriously determine if letting the banks fail (or nationalizing them) would have ultimately been good or bad for the world economy.

At this point I think it is much more useful to determine why we got into the mess and put measures in place to prevent it happening again.
 
...and the scale of the U.S. economy and the Icelandic economy cannot really be compared. I'm not saying that TBTF is a good policy, I'm saying that I don't understand enough about the world economic situation to seriously determine if letting the banks fail (or nationalizing them) would have ultimately been good or bad for the world economy.

At this point I think it is much more useful to determine why we got into the mess and put measures in place to prevent it happening again.

That is why one of the poll choices is "The two cannot be compared." I don't believe that. I think had we chosen Iceland's option circumstances, survival, and criminal prosecution would have forced actions to control the debacle. I understand the possible downside economic possibility but think that survival and continuity would have been self activating and we would have the satisfaction of having put the "crooks" in jail. As it is, we have assured the continuity of the survival of the "crooks." As I said, "the inmates are running the asylum."
 
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?


In regard to telling banks to piss off were not giving you any money, that is the right thing to do. No private company should get tax payer dollars unless that private company is providing a service(road work,construction,waste collection and ext) . There should be no such thing as too big to fail and I believe that the size of companies and corporations should be limited in order to lessen any financial blow they might have to the country should they fall.
 
too big to fail is too big to exist. our short term solution of bailouts won't be enough to prevent it from happening again. banks and other corporations should not be allowed to get big enough to collapse an economy if they fail. we'd be better off with greater competition anyway.
 
I would of preferred Icelands approach...I think Sweden did something similar as well awhile back.

The government has power to do that! In fact they did it to a huge degree during the Savings and Loan fiasco. I believe the only reason it didn't happen this time is due to the power of those banks on our political process.

It's never too late to change course. I can't stand Democrats in a lot of ways, the Republican Party has provided an answer to our problems. Double down on deregulation, supply side economics, and the Free Market system. I think it's completely the wrong answer but what have the Democrats proposed? The Democrats proposal look like a weird mismatch of neoliberal theory just not as much as the Republicans.

The Democratic party doesn't stand for anything anymore rather than as a bullwark against the reactionary right by maintaining the status quo
 
too big to fail is too big to exist. our short term solution of bailouts won't be enough to prevent it from happening again. banks and other corporations should not be allowed to get big enough to collapse an economy if they fail. we'd be better off with greater competition anyway.

I think that we are on the cusp of another crash because no change was regulated. Today, tomorrow, next year, but it's gonna happen because the "perps" got away with it, very profitably. That means it's ok to do it again and also because it's gonna be profitable again. That would be simple economics from Bart's Law. (bartcop.com)
 
'm not saying that TBTF is a good policy, I'm saying that I don't understand enough about the world economic situation to seriously determine if letting the banks fail (or nationalizing them) would have ultimately been good or bad for the world economy.

At this point I think it is much more useful to determine why we got into the mess and put measures in place to prevent it happening again.

That's kind of where I am...but more on the side of...."I sure wish I knew what would have happened had we let some of these big banks go out of business." All the money that was used to bail out banks could have been used to bail out homeowners, from my perspective. Directly re-writing their mortgages at their current worth depending upon individual circumstances.

Someone posted on DP the other day that American's net worth has declined by 28%. If that's true, it is because of the housing collapse, and the fact that the majority of American's largest asset is their home. Homeowners took it in the shorts. Banks got bailed out.

I have a problem with that.
 
That's kind of where I am...but more on the side of...."I sure wish I knew what would have happened had we let some of these big banks go out of business." All the money that was used to bail out banks could have been used to bail out homeowners, from my perspective. Directly re-writing their mortgages at their current worth depending upon individual circumstances.

Someone posted on DP the other day that American's net worth has declined by 28%. If that's true, it is because of the housing collapse, and the fact that the majority of American's largest asset is their home. Homeowners took it in the shorts. Banks got bailed out.

I have a problem with that.

It is not a liberal/conservative/radical issue, so everyone can come to agreement. Now, how can we get issue intomainstream politics as a campaign issue? The Greens have championed the cause but are of minuscle proportion on a National scale. I'm a Green, but it's like a vote for Nader or Perot, sometimes wasted. Worse,sometimes not the lesser of evils.
 
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.
 
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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.
 
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.
 
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.
 
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.
 
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.
 
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.
 
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.
 
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.
 
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.
 
Definitely not. Socialism is socialism and any form of it is pure evil and detremental to human existance.

I don't think we should of bailed ours out, but we definitely should not socialize them. We should of stopped and still need to stop debt spending. We never should of allowed or endorced an economy build on credit spending. We should not of allowed such monsters to build at the cost of competition in the market.

We have become a nation of shortsighted greedy people who elect politicians that pander to our greed. Way too many people in our country have been seduced by the Marxian herd into joining that herd and feeding at the public trough. Any herd is nothing but a prey rich enviroment for any predator that comes along. Many Americans chose to become the prey instead of the predator and now they want to bitch about the fact that predators are feeding on them. We want to control the predators amoungst us by insisting they join the herd. No herd can control predators, only competing packs of predators can balance others out, herds are just dumb prey deserving of predation. The Marxian herd helped to merge the predator packs and they became stronger and more dangerous instead of embrassing the competition between packs and everything got out of balance. Surprise, surprise.
 
There should be no such thing as too big to fail and I believe that the size of companies and corporations should be limited in order to lessen any financial blow they might have to the country should they fall.

Who is going to limit the size of corperations? Consider that a majority of size limited corperations have the tendancy to make the same error at the same time.

Another example is the auto firms. If a couple screwup and fail and the other three don't, where are the three that didn't fail going to get the parts they need. Note, since the suppliers of the outo industry have failed because 2/5s of their business is now gone. Oh no, now the whole thing has failed.
 
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?

Iceland didn't let their banks fail, they did this below.

Iceland NATIONALIZED the banks, froze their assets and basically took over the economy ...

We couldn't let the US banks fail without global economic meltdown, but we could have nationalized them to punish those who created the mess, cleaned up the banks, and decentralized them while putting the banks back in the hands of many individual private groups, instead of just a chosen few.
 
Definitely not. Socialism is socialism and any form of it is pure evil and detremental to human existance.

I don't think we should of bailed ours out, but we definitely should not socialize them. We should of stopped and still need to stop debt spending. We never should of allowed or endorced an economy build on credit spending. We should not of allowed such monsters to build at the cost of competition in the market.
...
A free market isn’t socialism. We allowed the banks to operate freely. They became (intentionally or unintentionally) linked to our economy in a way that if they failed it would cost you a bunch. Doesn’t sound like socialism to me. Sounds like a free market. A free market allows this, socialism may not permit it.
 
A free market isn’t socialism. We allowed the banks to operate freely. They became (intentionally or unintentionally) linked to our economy in a way that if they failed it would cost you a bunch. Doesn’t sound like socialism to me. Sounds like a free market. A free market allows this, socialism may not permit it.

Uh, ok. Yes we have, but the op was refering to Iceland. Look it up, the government there took over the banks. The pole was whether or not we should follow Icelands example. The socialism part was in responce to why I don't think we should follow their example, the rest is my thoughts on what we should of done and oppinion on what happened. In the last part I used the term Marxian for a reason, to distiguish it from the purley socialistic act taken by Iceland in taking over their banking system.
 
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