A Very Radical Way of Dealing with the Corrupt and Problematic Banks

[Bullet1987]

I say we start from scratch. I've been watching Michael Moore's recent interviews about 'Capitalism' and listening to Ratigan (he's not perfect but I enjoy his rants). We're getting to a time when something REAL is going to have to be done. Americans are waking up and the lie can't be perpetuated for too much longer. Wall Street has become a PROBLEM! Multi-national banks have become a PROBLEM! So I say we do something completely radical. Let the institutions fail and give a check to every American man, woman, and child that represents one of the major banks. That way, the money goes directly back to the people. From the ashes, build a new 21st century banking system that is DEMOCRATIC!! Not secretive, not influenced by lobbyists...but totally Democratic. Because what we have now is nothing close to democracy. And Moore will prove that with his new documentary. It's never been Democratic, it's just that no one has spoken out loud about it before. Now people are and it's getting mainstream attention.

[Turbineguy]

1. If we did that we would find out

what we do not want to know. Just what those banks are actually worth.

[Hamlette]

2. what is a democratic bank and why do you use "Democratic"?

we have to bail them out because we insure them. Are you saying we should not pay the depositors? And what do we do with the banks' assets? Do we dissolve all mortgages and give people their property? Clear all the credit card debt? How unfair. You'd be rewarding the least responsible and punishing the most responsible. I know how hard it is to "close" a bank and "get rid" of all the assets. It would take an army of highly trained ppl to do it.

Banks are such an easy target. Lending money is/has always been considered dirty. It is an unpopular practice.

We need to work on our ethics. We need to teach our kids that when you charge that gadget on your charge card, it is theft not to pay it back. Yes, theft. That you will pay double (or more) in the long run because of interest and fees. It should be looked down upon in our society instead of blaming the banks.

I know that some people are in debt for legitimate reasons but many (most?) are not.

And I still have no idea what a "Democratic" bank is. Pelosi would run it? Listen, it is a money making proposition. If you want to nationalize the banks, you either have to curtail loans or make money elsewhere. Would the populace that elected W twice be qualified to decide whether to invest in derivatives and if so, which ones?

When the economy melts down/cools off, banks fail. Price you pay.

[DJ13]

3. Are you saying we should not pay the depositors?

We arent saving the banks to save depositors, were saving them to save the speculators that own banking stocks.

Big difference.

The banks could fail and most savings would be made whole through the FDIC.

[Hamlette]

4. but, you see, the FDIC IS a part of the federal government

and it is broke.

To believe what you're saying, you'd have to believe the FDIC has enough money to pay out all the deposits at all the financial institutions in the US. Which is simply not true. The FDIC assesses banks a fee to cover losses when a bank goes under. If they all go under, the FDIC looks to the federal government to print more money. Just like they did in September.

And as for saving ppl who owned banking stocks, did you watch banking stocks? Freddy and Fanny went from $70 per share to 30 cents. It closed at $1.57 yesterday. So how did the bailout help the stockholders...exactly?

And you still haven't answered my question about the assets. Were you around for the Savings and Loan failures? Took forever to recover the assets.

I'd also point out that not all people in the banking business are crooks. That a huge part of what happened had to do with the real estate bubble bursting (same thing as happened when the S&Ls when bust). And our banks are democratic. What you want to do is nationalize them. Which is fine but we should have a discussion about that, instead of saying the FDIC could cover all deposits if the banks went under.

[DJ13]

5. It IS part of the government, but covering the FDIC obligations would

be cheaper than giving trillions to keep the banks in business.

[Hamlette]

6. 1. We didn't give "trillions" and 2. The FDIC insures $13.5 trillion in assets

covering FDIC obligations would cost the federal government $13.5 trillion. When the bailout gets close to that amount, we can talk again.

edited to correct typo

[DJ13]

8. Were only talking about the three biggest banks that are actually insolvent

NOT the entire banking system.

Seize BofA, Citi, Well Fargo, and support the rest just as we do now, and the remaining assets from them would make for a lot smaller hit to the FDIC than you (or Geithner) want to admit.

Too big to fail is too big to live without sacrificing everyone else in the process.

[PBS Poll-435]

10. Huh!?! on Wells Fargo.

:shrug:

The nations strongest big bank and fucking savior to the FDIC fund regarding Wachovia/Golden West.

Or maybe you didn't know.

:shrug:

[Hamlette]

11. can you say Lehman Brothers?

116 banks got bailout money. It's more than too big to fail, its too many to fail. If 116 banks went under, you'd have a run on the other banks. The model for nationalizing the banks has been done in other countries with differing success rates. (Iceland, Sweden) If you want to seize the 116 you should seize all of them. In that case, the argument shifts to whether it is in our best interest to nationalize the banks. I'm open to the idea but am not convinced it would be best.

It might have been bigger than 116 but many banks I know of did not want to take the money because of the stigma. Which is a good thing. Better to look at the causes of the crisis and try to avoid it in the future. If you can. The trading problems should have been curtailed but I don't know how you avoid the problems with real estate which was a huge factor. As it was with the S&Ls when they had so much trouble.

Protecting the stock market is a legitimate end. It is not just fat cats who have money in the market but most retirement plans, individual and company owned, and legacy gifts for non profits including universities and private health providers like hospitals are in the markets. If the market crashes, you lose all that. People who have been playing by the rules, putting a little away for retirement, wiped out. Don't you think the government has a reason to help protect those people from unforeseen consequences too?

[boppers]

7. So when banks fail, print more money, only call it a "check"?

..and encourage the use of credit unions?

I'm not quite understanding this proposal.

[earth mom]

9. FYI-Many of us said the same thing on this board a year ago and no one gave a damn.

The status quo is alive and well with Obama at the helm.