Ultra free market cheerleader calls for government takeover of banks

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speedracer

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After seeing thrust post in another thread that Obama's takeover of the auto makers qualified as support for his belief that Obama is a radical, I found this post on Business Insider (where I go for my "FREE MARKET OR DIE" news). They've come to the conclusion that there is only one way to avoid another massive bank bailout. How?
The strategy is simple, and we've been screaming along these lines since we launched. Punish the bondholders, sack managements, turn operations over to the FDIC, investigate fraud and prosecute.
Click to expand...
A government takeover.

The irony is so massive it's threatening to cause a black hole.

http://www.businessinsider.com/anti...tock+(ClusterStock)&utm_content=Google+Reader
 
It really is exactly what it says, either drastic measures have to be taken or you just kick the can down the road a bit.
 
Taking over private banks, as a solution, would be like fighting a forest fire by attempting to cover unburnt trees with wet blankets.

The root of the problem is the Fed, which isn't apart of government. Until Congress dismantles/takes over the Fed, then bank takeovers will just be more can kicking.

And that IS one government takeover I can support.
 
[quote name='thrustbucket']Taking over private banks, as a solution, would be like fighting a forest fire by attempting to cover unburnt trees with wet blankets.[/quote]
Ok. So then what do we do RIGHT NOW to fix them? I think you, me, and Msut can agree on these:

1. Virtually every major bank is guilty of fraudulent activity.
2. If forced to take back the tranched garbage they sold (which looks increasingly likely), they will be unable to continue as capital entities on their own.
3. The FDIC will be on the hook for a gigantic amount of money that involves an absurdly large percentage of middle class America (anyone with an account at Bofa, Chase, etc. etc. etc. which is almost everyone?) An FDIC default would literally empty the bank accounts of all of these people.

Where do we go? The Fed might be the root, but the problem looks real and really big. And this probably isn't the time for Fed hating (I'm not against you there), but for figuring out what the hell to do.
 
I honestly don't know. I don't even have a smartass answer for this one.

The problems is bigger than I understand, I can admit. But I don't even really understand how the government taking over banks would fix the damage already done, although it may fix going forward.

It sounds like none of this will be fixed without some massive write downs of debt. At some point up the chain the debt is just going to have to be forgiven and forgotten. How that's done, or how that's possible is beyond me.
 
[quote name='thrustbucket']The problems is bigger than I understand, I can admit. But I don't even really understand how the government taking over banks would fix the damage already done, although it may fix going forward.[/QUOTE]

I think the big thing would be for a third party (aka, in this case, the government) to go in, see what the damage is (who knows what they are hiding), try to fix it (along with punish the idiots who got us into this situation in the first place) and put guards in place so this can't happen again.
 
[quote name='Sporadic']I think the big thing would be for a third party (aka, in this case, the government) to go in, see what the damage is (who knows what they are hiding), try to fix it (along with punish the idiots who got us into this situation in the first place) and put guards in place so this can't happen again.[/QUOTE]

The government and FED did go in, they saw what the damage was, and this is the fix:

Print money (quantitative easing), lend banks money at 0% interest (more free money - literally), have banks buy T-Bills and make money by sitting on their hands, have the FED take some of the banks' worthless paper in exchange for free money.

That's the plan. Banks were and are being given trillions of free dollars. That's how TARP was "paid back". It's a total sham.

New boss (Democrats), same as the old boss (Republicans). Might as well combine the two parties and call it the Corporatism Is Awesome, Oh And If You Don't Agree With Us You Will Get Bombed party.
 
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