[estheticianI]

It looks like all the loans to banks (and other financial institutions) will end up getting repaid with a profit. The handouts to homeowners and car companies won't be. And the loans to big banks are more likely to be repaid at a profit than are the loans to smaller banks.

As always, on a moral scale:

big banks > little banks > homeowners > unions

On a side note, one of the reasons that big banks didn't end up costing the taxpayers money is prop trading and OTC derivatives market making.

Smaller banks that merely lent money to consumers and businesses were much more badly impacted.

Diversification

Zombie Volcker

[elalmhicabalp]

Keeping people in homes they can't afford is a benefit?

[TCjwwhcY]

TARP

It was always the right thing to do to prevent the financial system from falling.

[weO1bVp1]

Reducing the number of foreclosures reduces downward pressure on the market and thus lessens overall wealth reduction.

How does preventing a reduction in the overvaluation of the market do anything other than kick the can down the road?

[Andoror]

Aren't we essentially borrowing from future prosperity and crowding out private investment when we use inflationary government policy to plan out the behavior of the economy via governmental policy?

[Bejemoelemymn]

People with not even the vaguest clue about the state of modern macro making policy recommendations based on ridiculously oversimplified analogies

[Haibundadam]

Trust me, I don't think they have the slightest ****ing clue what they're doing...

Even the Fed is struggling (partly because of its retarded system of regional governors, some of whom have very little understanding of monetary policy)...

[spamkillerj]

Fast when slow. Tall when short. First when last. Dry when wet. Won when lost. Fat when thin. Summer when winter. How many more do you need to get the point, KH? I can go on...

[Anavaralo]

An argumeent can be made that TARP is a mixed bag. Some good some bad. The bad typically associated with auto bail out and giving preferential treatment to union pension obligations at the expense of of other creditors.

I'm actually ok with that, and yes I understand the claims about how that might discourage other future lending (the truth is in 10 years people will be tripping over themselves to lend GM money so it won't matter much), because literally this was the only way to keep GM working as a viable automaker. Before you ask, yes, auto makers are a nation's industrial jewels which need to be preserved where ever possible because their industrial capacity is vital during times of war.

[KuznehikVasaN]

Final vote for first half of TARP:
House Dems: 172/253
House Reps: 91/199
Senate Dems (counting Lieberman and Sanders): 41/51 (1 absence)
Senate Reps: 34/49

Final vote for second half of TARP:
House Dems: 241/254 (3 absences)
House Reps: 19/179 (4 absences)
Senate Dems: 51/59
Senate Reps: 6/40

Even while they were in power, most House Republicans couldn't bring themselves to vote for TARP, a bill drafted by their own party. While they were out of power, they completely abdicated responsibility.

[serius_06]

Anyone who can read knows that the financial bailout was originally started by the Bush administration and denounced by the Dems.

Denounced by the Dems? The majority of Congressmen who voted for the TARP program were Democrats and the almost exclusively the people who voted against it were Republicans (who were split about 50-50).

[weluvjessicaalba]

Next up: Curtis takes issue with the government CPI numbers and claims that inflation is far higher than it's been reported to be...

[BorBitExatini]

No, my claim was that the financial sector "bailouts" were not, in the end, anything other than liquidity provisioning on the timescale of a couple of years.

The auto and homeowner "bailouts" were, on the other hand, giveaways of free money to politically privileged groups (homeowners and unions).

Calling them by the same word doesn't make them the same.

[nithhysfusy]

I understand that you think there is some kind of desert argument to be made here. I, on the other hand, think that nobody in the First World today can make a claim to deserve what they own without that claim being laughable on its face.

The government lent money to banks and they paid it back. The government "lent" money to automakers, homeowners and such assorted scum, knowing full well that they were never going to be repaid.

the government is out money to one group, but not the other.

Playing "what if" and thinking it means something for desert is like asking "what if the Fed deliberately inverted the yield curve strongly", seeing that basically all consumer banks would go out of business, and concluding that a non-inverted yield curve somehow means that bank profits are "undeserved".

It's a moronic game that only morons engage in.

[serius_06]

Ecotard.

[Lictimind]

I miss him. He was fun to bash.



Drzxnkjhglhjglph isn't as amusing.

[Toossehew]

In all fairness, I was only one of a half-dozen or so who can claim credit for pedotard.

[standaman]

I understand that you think there is some kind of desert argument to be made here.

You understand wrong. I'm simply stating that because an investment is not repaid directly does not mean that it was a bad investment when put in the context of trying to save a flailing economy.

[Blotassefesek]

Signs that somebody has close to zero understanding of monetary policy:

They refer to "the" interest rate, and further show signs of misunderstanding of the importance of SPREADS much more than nominal rates

They use the phrase "overheating" to describe the economy

They make the connection high interest rates = low inflation

[DoctorDeryOne]

Why is it that the intelligence of posters is generally negatively correlated with the length of their posts?

If you want to become an intelligent commentator I suggest you first LEARN how monetary policy and financial intermediaries actually work and how their actions are transmitted to the real economy, instead of parroting some nonsense you've pieced together from listening to other ignoramuses.

If you want to be yet another opinionated ignoramus that people with actual knowledge only pay attention to in order to mock, then feel free to continue as you have.