1.) Why isn’t this comment from Bernie Sanders getting more play:
We must end the danger posed by companies that are “too big too fail,” that is, companies whose failure would cause systemic harm to the U.S. economy. If a company is too big to fail, it is too big to exist.
I know he is an evil socialist, but I have been asking the same thing for weeks. We broke up AT&T, went after Microsoft, and are thinking about the great gizoogle. Why are we not breaking up the financial organizations that we are all learning are the underpinning of our economy?
And, btw, as part owners of Freddie Mac, Fannie Mae, and AIG, and about to dump over a trillion to prop up the free market, can any of us really call anyone a socialist anymore?
2.) Now that the taxpayer is on the hook for “rescuing” the markets and thus rescuing America, making fun of Joe Biden for calling paying your taxes patriotic seems a little silly now, doesn’t it? Of course, maybe we should just go out and be really patriotic and shop some more, just like President Bush urged us to do after 9/11.
Mary
John, should I send you some orange NDP swag now that you’re One of Us?
And did you mean “Why isn’t this comment from Bernie Sanders getting more play?” Because, yeah, he’s dead on.
The Moar You Know
Why do you hate America, John?
Brian J
Is it really fair to say the government is going after Google? I know its ad share business is very profitable (even if I am still not entirely sure of how these things make money) and that the FTC is looking into its partnership with Yahoo, but is it really on the same level as the breakup of AT&T?
I don’t know if there’s sound economics behind saying a company is too big to exist. Why can’t the much simpler line be, “If they going to reap the benefits of public revenues, why can’t they pay for it?” It seems like an excellent way to introduce higher taxes on capital gains, if that’s what we want to do, or transaction taxes.
Stuck in the Fun House
It’s the same mentality that created the behemoth Homeland Security department. After it was first suggested to consolidate a FEW agencies, directly relevant to securing the homeland, wingnuts saw an opportunity to gain power and control over some 23 or so, government agencies, so they created one giant wingnut infested department to ensure it didn’t work like it should. However, their reasons for taking over a branch of private enterprise is to make it work, FOR THEM. Just thinking out loud as a newly minted conspiracy nut.
Johannes
Hm… Apart from self-destructive misadventures in Iraq and Afghanistan, the “shop some more”-patriotism may now have caused immensly more damage than the 9/11 attacks too.
Would be funny if it wasn’t so sad.
cleek
because, the nay-sayers will nay-say, even looking at such companies with an eye towards regulation or dismantling will cause irreparable harm to the economy. no, it’s best to leave them alone and hope they aren’t being managed by people who are so greedy that they will completely hollow-out the company in search of more and more short-term profit.
Jeff
Making the rounds:
These institutions aren’t “too big to fail”; they’re “too important to fail”;
And if they’re that important, they should be nationalized.
Chruch-lady
If I wrote for the Onion, this would be the headline:
“COUNTRY RUNS OUT OF IMAGINARY MONEY”
NonyNony
Why isn’t this comment from Bernie Sanders getting more play
Because it’s from Bernie Sanders who, despite probably knowing more about economics than 90+% of the elected yokels on Capitol Hill, isn’t considered a “serious” person by the millionaire pundits who are currently desperately worried about what is going to happen to their portfolios if Wall Street melts down.
I’m sure that the millionaire pundits are also worried about a populist push to raise taxes on the people who contributed to this mess in order to pay for it, and since they contributed and would be in the tax bracket affected by it, they’re certainly not going to give any play to the only Socialist politician at the national level. What, you want them to take a pay cut or something? Let the plebes pay for it. And if the plebes don’t have bread, well, let them eat cake!
Jeff
Oh, by the way, we need to break up AT&T again.
The Moar You Know
The point is that it didn’t cause any political damage to the Republican party. All else is irrelevant.
Once you understand that, you’ll understand the basis of the political and economic decisions made over the last seven years.
D. Mason
All I can say is that I’m feeling a little bitter right now. I feel an extremely strong need to cling to my guns.
tBone
Because SHUT UP, that’s why. Why do you hate the free market and capitalism and kittens and apple pie?
Jake
I just find it incredibly frustrating that we don’t have national leadership people feel they can trust. It’s increasingly difficult to separate the actual crisis from the politics.
KT
From my limited understanding, the problem soesn’t seem like the companies themselves are “too big to fail,” it’s the interconnections between them that have created this mess. What we have now is this giant fused mat of interconnected financial fibers and that seems to be why so many individual companies are in such dire straights.
No idea how to disentangle all these fibers as interconnectedness also has it’s advantages, but it might be worth thinking about.
Doctor Jay
You just have to learn to stop worrying and love the socialism, Dr. Strangebuck.
liberal
Me, too.
liberal
Brian J wrote,
Of course there is: when companies get too large, they can extract what’s called “monopoly rent”.
cleek
OT… the first Obama/McCain debate is this Friday. seems strange that there isn’t more talk about this.
PeakVT
Go Bernie. He’s the only Congresscritter that I’ve seen who has talked about a way to PAY FOR THIS CRAP, since the bill will be huge given the way Paulson is sweating. Oh, and since it’s a Bush Administration problem. The facts are clearly liberal on Bush’s fiscal track record.
Martin
Well, it’s a catch-22. Right now, consolidation is what’s keeping these guys from collapsing outright and really requiring a bailout. BofA was big before, but now they’re massive, but they bought out two of the biggest problems out there which we should be thankful of.
So, I think we need to let these guys sort out all the crap and come back in a year or two and start with Citi and BofA and tell them to trim down.
nicethugbert
That’s fuking right!
Martin
But that’s the same thing, really. If AIG has insured so many others and doesn’t have the funds to back those policies, they’re too big to fail simply because they would take so many others with them.
How big a company can be depends entirely on the impact of that company and whether the Fed or Treasury would feel compelled to bail them out. That’s the litmus test – would taxpayers be expected to put up money? If so, the company needs to get smaller. If Disney became the largest corporation in the world and then failed, I don’t think anyone would consider bailing them out – they just aren’t that critical to the economy. But a much smaller financial company leveraged to the nines might be enough to be a crisis. That shouldn’t be allowed. A corporation shouldn’t be able to overshadow the government. If they are absolutely that critical, they should either break up or be nationalized.
Comrade Binzinerator
Nope. Over at Calculated Risk, a number of the smartasses in the commentariat have taken to adding a “Comrade” prefix to their handles.
Adrienne
Actually, that’s the soundest and most basic of economic principles. (B.S. in Finance and Economics, NYU Stern School of Business) However, I would add “in a free and efficient market” to the end, which is essentially what we are aiming for.
Theoretically, in an efficient “free” market there would be something called “perfect competition” wherein no one buyer/seller within that market has what is called “market power”. There are very few perfect markets, but that is still the goal of a free market. By logical extension, if a company is “too big to fail”, meaning that their failure would have catastrophic ripple effects on their industry and the larger economy, then that company has enormous market power and is therefore a threat to an efficient and “free” market – ESPECIALLY if the market in which said company operates (like, oh, say the financial and credit market) is the foundation of the larger economy.
Basically, if one financial company is so large that its demise can trigger the collapse of the industry in which it operates, that company has WAAYYY too much power and it implicitly means that the market is inefficient. Extrapolate that principle and multiply it out to see how the failure of an entire fundamental industry (caused by the failure of one company spreading outwards) and it shows how distorted our economy has become – ironically, at the hands of the supposed free market (no gov’t intervention) champions. Their actions have done more to harm the free market than any liberal ever has or ever could.
It’s perfectly ironic actually that a Republican administration has ushered in the largest shift toward socialism that this country as ever seen – mixed in with a little old-school authoritarianism. It’s stunning the degree to which the adherents of this philosophy have completely failed to achieve its stated goals.
Sam Dobermann
The Sensible Plan
by guess who
The bolding is
minefrom whom I stole this. The only thing I would add is that we should also change the laws so that hedge fund managers, whose pay is not considered income for tax purposes, need to be included in section (a)–they helped get us into this mess, and I don’t care if they are huge contributors to the Democratic party, they profited handsomely, and they need to pay to help us get out of this mess. If we’re going to socialize the costs, we ought to get some social benefits out of the deal.Stolen from Incertus
Bernie Sanders
Why can’t we understand.
Socialism for the Rich, It’s not for the poor anymore.
Warren Buffet said there was a class war going on and the rich are winning —- or have won, I forget which.
The Other Steve
Ok… I’ve been thinking about this more.
I think we’re being had, big time. The company I worked for was one of the larger mortgage companies out there, and we may have had $15 billion or so of subprime on the books. I know when I left about 4 months ago they were talking about trying to dump the remaining $4 billion or so. They’d reported around $7 billion in losses since this shit started in 2006.
There’s been some articles like morgan stanley dumped $30 billion. So you’ve got $15 billion here, $30 billion there… start adding it all up and I’ll bet you are up around $250 billion or so.
But they’re talking about a lot more than that.
Which leads me to believe the problem isn’t subprime. The problem is something else. Games being played in the market. Credit Default Swaps… Derivatives and so forth.
That’s the root of the problem.
And the fact is, I suspect if the government buys up this debt, all they’re doing is allowing these companies to pay off their obligations to others on these games. So the people at the root of the problem are really going to profit.
The Other Steve
Here’s something on CDS… It’s Ben Stein, but the non-fucktard side of him.
http://finance.yahoo.com/expert/article/yourlife/109609
Gary Farber
“Why isn’t this comment from Bernie Sanders getting more play”
I did write about Sander’s statement here. You didn’t read it? :-)
Gary Farber
“Why isn’t this comment from Bernie Sanders getting more play”
I did write about Sanders’ statement here. You didn’t read it? :-)
ThatLeftTurnInABQ
That was pretty funny, but then the historical nitpickers pointed out that socialism from above with corporatists calling the shots is really national socialism, so the correct prefix is “Herr”, not “Comrade”.
It doesn’t seem to have caught on, probably because it hits a little too close to the truth to be very funny.
I’m still waiting for someone to call Paulson’s plan an enabling act and point out that it scans better in the original German.
BTW, where does $700 billion rank in the scale of annual government budgets across the world? How large of a sovereign country would Hank Paulson be all on his own, with that much money?
Whoops! Just did a little bit of googling, and it turns out that 700 b-large is enough to get Hank invited to the G7 all by himself:
Church Lady
John, no one seems very interested in your second question. Well, for those of you not feeling patriotic enough and wanting to send Uncle Sam a few more of your hard earned dollars in order to, you know, feel a little more patriotic, I’ve got the address where you can send that extra little gift (preferablly wrapped up in a little American flag). Checks (or money orders), payable to the United States Treasury, can be sent to the following address:
Gifts to the United States
U.S. Department of the Treasury
Credit Accounting Branch
3700 East-West Highway, Room 6D37
Hyattsville, MD 20782
Just as soon as Joe Biden proves his patriotism to me and sends in that check, I’ll consider sending one too.
Comrade Binzinerator
Bullseye.
It also explains a good deal of their seemingly incomprehensible dumbfuckery.
People have for years assumed the GOP’s choice of action was supposed to benefit the nation. So the incredible level of incompetence we witnessed seemed incomprehensible. But what we saw as incompetence often had a purpose. We just couldn’t see the purpose behind it because our frame of reference was entirely wrong. Add in a good dose of actual incompetence and it gets even harder for people to see what they’re really up to.
Coming off as incompetent has its uses. The ball was dropped intentionally as often as not because they thought they could benefit politically or economically from it. (See warnings about OBL to attack US, Katrina used as an agent of ethnic cleansing in N.O., and now the Wall Street free-for-all fraud, toxic debt and meltdown. They will even get some benefit from nationalizing the finance industry, aside from what their rich friends gain: no money will be left for any progressive programs if Obama wins, and medicare and social security will face renewed attacks to be cut. Count on it.)
Sure they’ve taken some lumps for what seems to be sheer incompetence. But they’ve dodged being held to account for much worse: treason, outright criminality, and a chilling banality of evil. It’s like copping to a misdemeanor to avoid a felony charge.
It has been a conspiracy. A vast rightwing conspiracy. All this nonsense about “Leftwing Conspiracy” was just projection.
In a reverse sort of Big Lie effect, no one believed a rightwing conspiracy because it seemed, well, too big a thing to be possible, too vast and interconnected to have any credibility. And besides, with the right for years calling out a conspiracy on the “Left” (ha! there is no real Left left in this country) effectively innoculated the right from examination for the same. Same reason doughy pantload is now pushing ‘liberal fascism’.
thomas
OK Comrades, time to figure out how to pay.
I think that those who most greatly benefitted from the bubble should pay the freight for popping it. We can start with capital paying the same tax rates as labor. Perhaps we should also add some SSAN to that too. Coupon clippers shouldn’t get that free ride. Next, throw in the return to the 39% rate. Bush’s give-away must be repealed yesterday.
I’m an urban planner, not a dismal scientist so maybe what I’m saying won’t completely work, but it’s a place to start.
Now I see Paulson and his ilk don’t want the gov (that’s us) to get any equity for the bailout. That’s bovine feculence. We bail, we sail when the wind returns.
Just remember, we’re all Keynesians now.
Herr Binzinerator
Jawohl.
KRK
Since the only person who responded to question #2 opted for the very serious “if you love paying taxes so much, why don’t you marry them?” response, let me balance it out by saying my only quibble with your point is that it’s not “now” silly to make fun of Biden for his “paying taxes is patriotic” comment, because it was always silly to have done so.
zoe from pittsburgh
Is it overly hyperbolic to call what is going on “economic terrorism”? Why do I feel like the Bush-Paulson plan is nothing more than a 3-page randsom note demanding $700,000,000,000 from the very people who kidnapped the economy– and if we don’t pay up they’re going to kill the economy? How do we know it isn’t already dead?