Shofercia wrote:If you think that it's just kids with student loans, oh boy, are you misinformed. As for the banks on Wall Street doing what works - yeah - that's bullshit.
No, you deliberately misinterpreting what I said is.
Wall Street people do what they think will work. They don't know the future any more than anyone else does. They make guesses about it. The point is that Wall Street is not idealistic. And as such policy suggestions that are obviously based more on idealism than on likely being able to work will not resonate there.
Cut the crap with the fanch-shmancy terms, apologetics, etc. It's really common sense. You don't give out loans to people that can't pay back the loans. Period. If you can't figure that out, you shouldn't be running leading institutions in the Djiboutian Economy, but somehow they're still at the helm of US Economy.
No, we are talking about structured finance here. You don't get to change the issue to one you've got a better answer to. The whole loans thing is not the reason they did it. Misjudging the credit risk is not the core of the problem. Have a read and we'll keep going then.
Oh, and you don't gamble with other people's money, by betting that the housing price will always increase, especially when said price is already inflated.
Mind you, when you didn't gamble on this, you got in trouble too...
1) Making risky short-term investments without thinking about the long-term outcome. Like in the housing crisis. Banks made a short term profit by selling houses to people that couldn't afford the loans, but didn't realize how badly said sales were going to hurt the banks in the long term.
Again, I think that's a pretty serious misunderstanding of what happened. But fair enough - I take it that you believe regulators are able to prevent this kind of thing from happening.
2) Holding the Board of Directors, CEOs, CFOs, and other leading individuals, criminally and civilly accountable for actions that were just plain reckless. Any of the chairmen of the three companies responsible for the Gulf Oil Spill arrested? Or is it pragmatic to leave those, whose lobbying efforts damage an entire gulf, in charge? Troy Davis is executed, while Bernie Madoff gets house arrest, instead of jail. And when the corporation goes bust, the Government bails them out with taxpayer dollars, and the board gives itself a nice bonus. Clearly that's "pragmatic".
I'm not entirely sure how to respond to this. You seem to be aiming for an appeal to emotion, but I'm just confused. Firstly, I agree with you that the people responsible for the Gulf spill should be held responsible. I also agree that Bernie Madoff should not be getting an easy ride and that white collar crime should not be treated differently in terms of the actual treatment post-conviction. I don't see how either is relevant to our argument though, because you're throwing in these examples alongside claiming that the banks did wrong and that bank CEOs should be punished for losses incurred through bad investments.
And can you find me an example of this whole bail out/bonus thing? Because I have this feeling that most of the cases you might be thinking of actually involve banks after they had paid back the bailout funds, or contracts that had been made previously that they were not legally able to break (which is also something I disagree with in most cases). If there are other cases more like what you describe, I'll join you in the outrage. Ken Lewis' and ML management's fleecing of BofA/ML shareholders deserves a special kind of hell, in my view, for example.
Legal Reforms: Lessen the requirement for declaring a class action. Pass laws that provide for safe working conditions, with reasonable break time. Limits on offshore banking and tax evasion techniques. Pass laws that hold media accountable for deliberate lies. See Jim Cramer's "Mad Money" for an example. Make corporate privacy laws less strict.
Some of these make sense, others I very much disagree with. But I don't think a single one of these has anything to do with the housing market...
Election Reforms: Require that all media broadcasters allow all candidates airtime during elections, and pay for said airtime with non-political advertisements.
I don't think that's going to make as much of a difference as you'd like. And you'd need some sort of screening system for candidates still - especially if you're going to require that all candidates get equal airtime (would you?). As I said before: "rent too high" guy getting the same airtime as a more serious candidate doesn't seem quite right, especially if you allow many, many candidates to run.
Education Reforms: Free education for all - and raise the teacher salaries in the K-12 system. Everyone in the K-12 system is reasonably compensated, except teachers. Kind of hard not to see why that's fucked up. By free education for all - I mean that you should also include colleges and universities.
Good teachers yes, all teachers no. Free education is silly - there is no such thing. You'd have to cut spending elsewhere or raise taxes to do so, which turns it into a cost-benefit thing. I don't think the benefit of free education for all outweighs the cost: corner solutions are rarely the best. And there are quite a few indications that making tertiary education costless combines with people's myopia to lengthen the average time people take to finish degrees, which I don't see as beneficial to the economy at all.
Other Reforms: End participation in wars abroad, unless it's US Allies. (Pull out of Iraq, Libya, stop having basis in 50+ countries, etc.) Invest in new forms of alternative energy.
As you may know, I very much disagree with you on Libya. Otherwise, yeah, sure. Alternative energies is also good, though I have a feeling that the US has already lost that one - the Chinese are getting on top of large-scale applications of these technologies very quickly. Might end up being better to just buy Chinese.
Still, no relation to the housing market.
