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What To Believe?

By Big Tent Democrat, Section Other Politics
Posted on Mon Apr 19, 2010 at 11:39:43 AM EST
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Steven D writes:

[An] AEI expert kept repeating the same talking point over and over -- the bill is bad because the Democrats want to set up a $50 billion dollar fund paid for by the big financial institutions. This is bad because it will enshrine "Too Big to Fail" in the law and in the minds of those who deal with those banks.

Thus the Republicans are opposed to financial reform on principle alone: they want to prevent the evil Democrats from ever bailing out Big Banks again. Republican[s] [. . .] want you to believe that their opposition to financial reform is to protect the public, rather than serve the needs of the financial industry [. . .]

Well put. But then there is this:

The Obama administration is telling Senate Democrats to ditch a measure in their financial reform bill that would create a $50 billion liquidation fund by assessing a fee on big financial institutions.

Seems the Obama Administration wants you to believe it too.

Speaking for me only

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    What To Believe? | 18 comments (18 topical)

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    I've pretty much stopped believing (5.00 / 1) (#11)
    by Anne on Mon Apr 19, 2010 at 12:47:29 PM EST
    what people say - this Senator, that Representative, the hordes of anonymous sources, the president, members of his administration - and started looking at what they do.

    All we can do is push against the possibility of policies we don't like, and wait to see if it results in actions we do.

    Not that it was ever possible to put a whole lot of trust in anyone associated with government, but could it possibly have ever been this bad?

    Whatever happened (5.00 / 1) (#16)
    by TimNCGuy on Mon Apr 19, 2010 at 02:41:08 PM EST
    Whatever happened to the theory that "banks" and "investment firms" should be separated into separate institutions?

    Banks, with FDIC insured deposits, already have a fund (paid for by banks) that is used to wind them down when they fail.

    Non-insured investment houses should be allowed to fail just like any other company does.  Just let them go bankrupt.  The investors lose their money.  The employees are out of work.

    What am I missing?  Wasn't this the whole too big to fail issue?  That banks had gotten into the investment business and investment houses had gotten into the banking business?

    How do you have deposit insurance without. . . (none / 0) (#1)
    by andgarden on Mon Apr 19, 2010 at 11:42:17 AM EST
    insurance premiums?

    This isn't about deposit insurance (none / 0) (#4)
    by Militarytracy on Mon Apr 19, 2010 at 11:53:45 AM EST
    It is about insuring high risk how ever leveraged ventures that could fail.  Depositors will always be insured by the FDIC.

    Parent
    I think the point is (5.00 / 1) (#5)
    by Big Tent Democrat on Mon Apr 19, 2010 at 11:58:33 AM EST
    this is analogous - this is bailout insurance.

    Parent
    Oy....he's too witty for me (none / 0) (#7)
    by Militarytracy on Mon Apr 19, 2010 at 12:00:26 PM EST


    Parent
    Well, just to protect the depositors (none / 0) (#13)
    by andgarden on Mon Apr 19, 2010 at 01:41:29 PM EST
    in shadow institutions. One thing I'd like to know is why this would have been necessary for Citigroup? Their regular depositors were FDIC insured, so what of the rest was at stake?

    Parent
    They want to insure the too big to (none / 0) (#18)
    by Militarytracy on Mon Apr 19, 2010 at 06:37:02 PM EST
    fails so that if they make very risky super leveraged investments and those fail, it won't take the whole institution down.  Then it would only take investors down and the markets down.  It is in my opinion a horrible idea because there is once again no consequences for playing insane casino.  And the tax payers and the public has to deal with the aftermath of the investor destruction while the institution lives on.  This whole "system" has worked out terrific for them all right now.  They blew everything up, we saved them, the Fed is now loaning them money for literally zero percent so that they can hopefully regain their health, and they are charging a lot of people fourteen percent on that money now and still taking HUGE bonuses.  They lost nothing, we lost everything, they think this is a terrific way to do things.

    Parent
    Heh (none / 0) (#2)
    by Militarytracy on Mon Apr 19, 2010 at 11:42:18 AM EST


    Have you burned out so early in the day? (5.00 / 1) (#3)
    by oculus on Mon Apr 19, 2010 at 11:45:09 AM EST
    Such a torrent.

    Parent
    Of all things I have Pertussis (none / 0) (#6)
    by Militarytracy on Mon Apr 19, 2010 at 11:59:30 AM EST
    Looks like that was what was fueling my horrible asthma lately.  The doctor gave me a Z pak to clear up anything that was going on with me and then sent me to the lab for a bunch of tests.  I was feeling so much better too, but my labs came back with big time titers for Pertussis....he said it was suspiciously high for titers due to a childhood vaccination.  And then this weekend I went from feeling and doing really well to doing badly again and coughing up yuck.  I go back to the doctor at 2:00, but I guess I'm worn out on ranting :)

    Parent
    Pertussis is making a comeback (none / 0) (#12)
    by Dr Molly on Mon Apr 19, 2010 at 12:59:11 PM EST
    according to my doctors, supposedly related to current anti-immunization trend.

    Be careful!

    Parent

    I actually read... (5.00 / 1) (#14)
    by Dadler on Mon Apr 19, 2010 at 01:44:08 PM EST
    ...that strains of the bacteria are simply developing resistance to the vaccine we use.


    Parent
    Josh and Zoey and Naomi (none / 0) (#17)
    by Militarytracy on Mon Apr 19, 2010 at 06:27:27 PM EST
    are all current in vaccines, looks like adults with old vaccinations are at risk and it is making a come back.  I think that one of our friends likely has it too, she broke a rib coughing a few weeks back.  If you have been vaccinated it hits you much weaker but if you have asthma it plays hell and it can be months to get beyond the coughing.  Wondering if older asthma sufferers should consider getting a new vaccination.  He gave me a steroid shot, a breathing treatment, and one of those 6 day packs of steroids.  I am to use my Proventil four times a day for ten days and let my lungs rest and heal.

    Parent
    You know (none / 0) (#8)
    by lilburro on Mon Apr 19, 2010 at 12:04:04 PM EST
    how did we lose all this momentum

    As readers know, several Congressional members have alluded to a private meeting with Paulson and Bernanke in which vague economic Armageddon was threatened if Congress did not immediately hand Hank $700 billion, with no oversight. As the political debate raged over the next 15 days, several members expressed a sense of shock over the severity of the secret warnings, while refusing to divulge the details to a concerned public.

    to a bunch of middle aged white Republicans grumbling vaguely about taxes and holding teabags?  There are so many issues at hand.  Maybe one issue for our side is that the blogosphere got good at beating up and pushing back against Bush (and Bush friendly media), but this is a new animal.

    Votes Obama received in 2008:  69,456,897
    18% of people that support the Tea Party movement (according to the NYT poll, and whatever "support" means):  55,261,179

    First of all, suck it Tea Party, you still lose.  Second of all, if 18% of the US population is truly receptive to the Tea Party, there has to be better messaging.  From us, from Obama, from everybody.

    So the alternative is that the government (none / 0) (#9)
    by ruffian on Mon Apr 19, 2010 at 12:12:03 PM EST
    Liquidates failed banks without a fund? That sounds more like a bailout to me.

    The argument that the existence of this fund gives perverse incentive to be too big to fail does not convince me at all. This is not bailout that lets you live. This is a liquidation fund.

    Correcting myself, as I often must (none / 0) (#10)
    by ruffian on Mon Apr 19, 2010 at 12:21:22 PM EST
    Liquidating the banks without a bank contributed fund means the taxpayers will foot the bill, not that the banks won't be liquidated. That is not a bailout as I implied, but like a bailout in that it is taxpayer funded.

    Also, McConnell's argument I stated above is just  string of Luntz buzzwords, not an argument so it is no wonder it makes no sense.  

    Parent

    You're more on the ball than me... (none / 0) (#15)
    by kdog on Mon Apr 19, 2010 at 01:59:13 PM EST
    I can't figure out the need for a "liquidation fund".  Bank goes belly-up, state seizes the assets and uses that to pay any liquidation costs...including the seizure of ill-gotten gains of executives.  

    Just like they do when the state liquidates other criminal enterprises.

    Parent

    What To Believe? | 18 comments (18 topical)

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