There is clearly a difference between a postal service, a postal retail bank and a corporate bank and/or an investment bank. I don't know any examples of a successful corporate or investment bank run by the state.
AFAICT, nobody here is suggesting that the state run investment banks outright. Just strip out the entire retail element, and let the rest stand or fall on its merits.
There is more than enough vital infrastructure investment over the next decade to keep the entire workforce busy, even if the entire investment banking sector collapses in a poof of smoke.
You are using the current financial crisis as proof that the private financial system is counterproductive.
Not quite. I'm arguing that you need to have airtight compartmentalisation between the payment clearing and retail system on one side and the investment banking system on the other. And that the investment banking system should be allowed to burn to the ground when it fucks up on this kind of scale.
But what have you to say of Soviet financial (economic) crisis in the late 80s - and the lessons we should learnd from it?
That subsidising a Mil-Ind and surveillance complex to the tune of a double-digit percentage of your GDP is a Really Stupid Idea.
That one-party political systems have a built-in problem with cronyism.
And that using cronyism as the basis for political appointments is an Even Stupider Idea.
Apart from the critique, which I can understand, I don't see any constructive, forward looking, positive proposals.
Then I have some suggested reading for you.
However, the existence of proposals that take stock of the near future should not be construed as a license to refuse to take stock of the recent past. There are still people who need to be shown the business end of a pitchfork.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
I don't know any examples of a successful corporate or investment bank run by the state.
I don't know any examples of 'succesful' corporate or investment banks which aren't heavily subsidised by the state - with generous tax breaks and lax tax enforcement and deregulation, and most recently with generous hand-outs.
It didn't happen in the UK with Northern Rock - no matter that that's how the plan was presented - and it's hardly going to happen in the US.
Are you denying that money has gone?
And as for Geithner... well, if he tells you that the sky is blue, you should look out of your window before agreeing.
So at best, the cost goes down by an order of magnitude. And that's not nearly enough for you to have a case.
TARP is the only one of the multitude of bank handout programs that had any modicum of oversight. If you think that the banks have behaved any better with the money that the Fed printed them outside Congressional oversight, then I have a bridge I want to sell you.
Although the real issue is particularly with finance schools and the whole culture of this industry rather than banks themselves. The problem is those people's mentality, rather than the "banking system". There was an article by Krugman speaking about making banking boring. Related to this, maybe there are too many unused bright and adventurous minds out there that need to be occupied with something. Before they were making wars out of nothing, or becoming pirates. Now they put up bubbles. So again, oh well. The enemy is ourselves, in the end. Maybe mankind is doomed to autodestroy at some point, one way or another. Free at last! Free at last! Thank God Almighty, we are free at last! (Martin Luther King)
Frankly I didn't think it would amount to 70 billion.
70 bn is just the bonuses. Dividends and payouts from mergers are another 130 bn or so. Or rather, it was when that article was written. It cannot be smaller today, but it can certainly be greater.
Although the real issue is particularly with finance schools and the whole culture of this industry rather than banks themselves. The problem is those people's mentality, rather than the "banking system".
Greedy fucks who are willing to gamble with other people's money will always be there. Appealing to some improvement in the general moral code of the industry has never actually worked. So any system that cannot put greedy fucks who gamble with other people's money in a straitjacket and show them the door is systemically broken and has to be changed.
http://www.nytimes.com/2009/04/10/opinion/10krugman.html
there were times when things were -- manageable. The tide turned in the 90s (as in many other domains) when the complex derivatives and the IT took off. And then like I said, the society cannot consider itself without blame. That kind of culture is now pervasive in the society, libertarianism, a sort of alpha-male individualism and disinterest for the others, this rat race for material possessions, a certain cynicism, short-termism, lack of education (no, that does not mean I would be some old school conservative), and in general what we call "nivellement par le bas" in all places. Well here it is, we harvest what we sew. Free at last! Free at last! Thank God Almighty, we are free at last! (Martin Luther King)
But it is not enough. Never has been, never will be.
They could also be forced to live in a poor neighbourhood, doing some garbage collecting jobs. Free at last! Free at last! Thank God Almighty, we are free at last! (Martin Luther King)
You can call those tax breaks subsidy, you can also call them investment :)
Of course you can. And by that logic, the state can also decree that it will raise a shipyard and start building ship, which it will then hand out for free to its merchant marine.
But I thought you were the one who were opposed to the government deciding what the private sector should do?
As to the generous handouts, those were loans to be payed back with interest, right.
That is possible, in the sense that there is a non-zero probability that that will happen.
In that sense, it is also possible that all the oxygen molecules in the room in which you are currently sitting, will spontaneously gather in one corner of the room, thus choking you to death. That, as well, has a non-zero probability.
Physicists have an expression for the kind of probabilities we're talking about here: We call them "thermodynamically low."
