Newgrounds.com — Everything, By Everyone.

At 9/29/08 06:20 PM, MattZone wrote: Capitalism is a Darwinian process. Let the losers get eaten.

You make a persuasive argument.
Capitalism has its own natural selection; we shouldn't pay to uphold poor management, we should let them go under and be replaced by more qualified people. Sure everyone may suffer a bit from this transition but it's a good long-term investment. Right now it seems that the government is just saying "Oh, we're going to pay them... All these banks had excellent management, they just had BAD LUCK".
Maybe they did have a bit of bad luck, but seriously, bankers are in the business of probability, they should have seen this coming.

This is beside any argument in this topic, I am just saying I don't like giving money to Wallstreet but if we don't then the economy is gonna be screwed up for a while.

At 9/29/08 10:23 PM, MattZone wrote: An intelligent post.

Thank you, I didn't feel like responding to that mess of a post. You said exactly what I was going to say and hit it spot on.

We might suffer a little because of these banks failing, but we're only suffering in the stock market because the bailout was proposed in the first place. We would've suffered less if it was only a known that the banks would fail, but stock holders selling all at once when the bailout fail was announced was a much more drastic drop relative to if the information about the banks collapse was just common knowledge. Stock holders would have gracefully sold, dropping the stock prices of those banks and eventually it would be bought out by other banks and in turn those bank's stocks would have gone up.

Darwinism truly is a good way to describe this whole thing. We might suffer for a few years, but in all reality the US economy is long overdue for a recession. We've been doing well for a fairly long time and it's a good time to let all this bad blood drain out of the system.

If they would've passed this bill, where do you guys think they would get this money from? Our pockets? Sure, maybe a little; however, they would probably print most of the money and cause a huge inflation, something the fed is notorious for doing.

I guess if the revised plan doesn't go through on thursday we'll see a recession but it'll be good in the long run.

At 9/29/08 10:23 PM, MattZone wrote: Wrong on all four counts. First, none of these banks control the money supply, the Federal Reserve Banks do.

They may not control it individually, but their operation does create money. Every time they lend out more than they hold in deposits, which every bank does, banks are creating money. An increased unwillingness to lend because of panic or whatever will at least slow the rate of money growth. The Fed can encourage lending through lower overnight interest rates or reserve ratio rates, but the end decision lies with each bank.

Of course, there's no reason why they would pass up an opportunity to make a profit, but then again, there's no reason why they would depend on returns from loans made to greedy or overconfident mortgage-buyers to stay solvent, either.

Nooo I love intel... and their shiny processors...

At 9/29/08 09:29 PM, AznWarlord wrote:

The thing is, the banks do just skip away freely with the money. There are investigations going, some bank officials will have to pay heavy fines, maybe even go to jail. As for the American people, they will never be paid back, but I'd prefer to lose some of my money so that the rest of it actually has some value, than to have a shitload of cash that can't buy me a loaf of bread.

There are no investigations going. The media would much rather have people think that somehow the bail out will save hte nation when the truth is that it won't. It WILL make things worse. Congressional Martil Law prevented Congress from reading the bill that should be enough of a red flag. Look up "Ponzi scheme" it;s what our current money system is based upon. As long as it's going it's okay but our system is destined to crash at some time and sooner is better than later. It's much easier to recover from when one U.S. dollar is worth .6 Euros as opposed to 0 Euros. The best analogy I can think of is that our economy is a junky and the bail out is a fix. Yeah it might feel good for now but it's only going to make the crash worse. Google "money as debt" it's a 45 min vid which explains everything.

At 9/29/08 05:25 PM, AznWarlord wrote: Seriously. Serious. If Wall Street gets raped, so do we. Dow Jones fell over 700 points minutes after the bill was rejected. Let just look at a list of companies that are a part of the Dow.

Coca-Cola
McDonalds
Microsoft
Verizon
HP
Intel
GM
GE
WalMart

hmmm does that mean mcdonalds is going to lose buisness?

At 9/30/08 10:13 AM, Cebster wrote:

At 9/29/08 05:25 PM, AznWarlord wrote: Seriously. Serious. If Wall Street gets raped, so do we. Dow Jones fell over 700 points minutes after the bill was rejected. Let just look at a list of companies that are a part of the Dow.

Coca-Cola
McDonalds
Microsoft
Verizon
HP
Intel
GM
GE
WalMart

hmmm does that mean mcdonalds is going to lose buisness?

Bit off topic but i hope they do, I hate mccdonalds, its fucking NASTY. My neice had a kids meal and i was picking the pickles off and they were blue! Go burger king, not that its that much better, but whoppers are tasty.

At 9/29/08 10:23 PM, MattZone wrote: Your opposition to social Darwinism is noted. It is also counter-factual, and thus irrelevant. The world works the way it works, whether we want it to or not. Capitalism is, by design, a competitive system. As with any competition, there are winners and there are losers. Socialism/Communism tries to avoid this and make everyone a winner, but has historically done the exact opposite. Churchill was right when he said "Capitalism is the worst form of economic system, except for all those other forms that have been tried from time to time."

Counter-factual in what respect? Also arguments being counterfactual do not necesssarily make them irrelevant, just weaker.
I think your views on Capitalism and Communism rest heavily upon subjective definitions of these terms. The USA does not (nor any other country for that matter) have a Capitalist economy; welfare provision, pensions, free education and nationalisation are all socialist concepts. I think we can all agree that a purely Capitalist economy would be dreadful, for example the formation of monopolies etc, and this is demonstrated by the fact that the Government does set regulations and interfere in the economy (conforming to socialist/communist principles). Given that the economies of the World's greatest powers are based upon a synthesis of Capitalist and Socialist aspects, i don't understand how you can cite Social Darwanism and Capitalism's superiority as an economic system to justify the rejection of Federal aid for failing financial institutions.

You make reference to the so called Communist nations of history. To honestly believe that these states embodied Communist values you have to be pretty naive. I believe that Marx claimed that those who would path the way towards achieving a Communist nation would be the most economically developed of countries, at the time - England. Clearly he did not evisage the likes of the USSR and China adopting Communism, it is no wonder that they failed.

Your saying this like the world is going to end. I'm sure we will be fine in the long run.

At 9/30/08 01:13 PM, Randy74 wrote: Your saying this like the world is going to end. I'm sure we will be fine in the long run.

Besides, even though it was rejected, they can still look on it and pass it.

At 9/29/08 08:08 PM, aviewaskewed wrote:

At 9/29/08 07:02 PM, Saint-kilich wrote: missing my point.

I'm not against aid man, I'm against the idea that the government will once again give these guys money and not expect THEM to pay it back, that the taxpayer must.

Oh yeah cause 3000$ is soooo much

At 9/30/08 01:13 PM, Randy74 wrote: Your saying this like the world is going to end. I'm sure we will be fine in the long run.

;;;;;
One only needs to look at how the markets bounced back today, to realise this is a money grab by the billionaires...who would like to be trillionaires .
The U.S. & the entire world were no where near as intertwined when the Depression happened as they are today.
Let the people who have jeopardised their Banks & financial institutions go belly up. There will be someone else step in ,there's the huge economic engine of China & India.
We may hurt for a bit, but I still believe that the "melt down" is more about Bush's friends losing their shirts than it is the entire population !

At 9/30/08 07:21 PM, Frattochino wrote: Oh yeah cause 3000$ is soooo much

Do the math again.

11.3 Trillion *!* (incl. bailout) divided by 150 Million workers (aged 16 and over) = $75,000 per person.

(*!* federal government debt only)

At 9/29/08 11:12 PM, adrshepard wrote:

At 9/29/08 10:23 PM, MattZone wrote: Wrong on all four counts. First, none of these banks control the money supply, the Federal Reserve Banks do.

They may not control it individually, but their operation does create money. Every time they lend out more than they hold in deposits, which every bank does, banks are creating money. An increased unwillingness to lend because of panic or whatever will at least slow the rate of money growth. The Fed can encourage lending through lower overnight interest rates or reserve ratio rates, but the end decision lies with each bank.
.

You're half right. Individual banks do create money through fractional lending, but the Federal Reserve decides what the reserve ratio is, which effectively controls the growth of the money supply. More importantly, it doesn't matter which individual banks do the lending. If some fail, no matter how large they are, others move in to pick up the slack.

At 9/30/08 12:18 PM, Saint-kilich wrote:

At 9/29/08 10:23 PM, MattZone wrote: Your opposition to social Darwinism is noted. It is also counter-factual, and thus irrelevant. The world works the way it works, whether we want it to or not. Capitalism is, by design, a competitive system. As with any competition, there are winners and there are losers. Socialism/Communism tries to avoid this and make everyone a winner, but has historically done the exact opposite. Churchill was right when he said "Capitalism is the worst form of economic system, except for all those other forms that have been tried from time to time."

Counter-factual in what respect? Also arguments being counterfactual do not necesssarily make them irrelevant, just weaker.

Counter-factual in the respect that Capitalism is a Darwinistic process. You're correct that a counter-factual argument is weaker, but not irrelevant. My bad.

I think your views on Capitalism and Communism rest heavily upon subjective definitions of these terms. The USA does not (nor any other country for that matter) have a Capitalist economy; welfare provision, pensions, free education and nationalisation are all socialist concepts.

Minor nitpick: pensions are neither a Capitalist nor a Socialist concept. They can exist under either system as a form of compensation. The only difference is that in a Socialist system, pensions would be mandated by the government, whereas in a Capitalist system the business owners would decide whether or not to give their workers pensions. Also, I'm aware that there has never been, nor will there ever likely be, a purely Capitalist or a purely Socialist country.

I think we can all agree that a purely Capitalist economy would be dreadful, for example the formation of monopolies etc, and this is demonstrated by the fact that the Government does set regulations and interfere in the economy (conforming to socialist/communist principles). Given that the economies of the World's greatest powers are based upon a synthesis of Capitalist and Socialist aspects, i don't understand how you can cite Social Darwanism and Capitalism's superiority as an economic system to justify the rejection of Federal aid for failing financial institutions.

A purely Capitalist economy would have dreadful effects, notably on the environment. As for monopolies, they are only bad when they are protected by the government. Getting back to the issue at hand, the reason why I reject Federal aid for failing financial institutions is because doing so will cause far more harm to the system. It creates a moral hazard when rolling the dice and winning is rewarded, but rolling the dice and losing is also rewarded, or at least not punished. It encourages the players to take ever greater risks, until they sooner or later (usually sooner) take a risk that is so large that when they lose, even the House (the government and the taxpayers) won't be able to cover the bad bet. That is a very good way to trigger another Great Depression.

You make reference to the so called Communist nations of history.

No I didn't. I made reference to Socialism/Communism. As I previously noted, there has never been a purely Socialist country (the U.S.S.R. was very far on that end of the spectrum, however) and there has never been an even remotely Communist country. There have been small Communist communities (called "communes", go figure!), and their problems have been well documented.

At 9/30/08 06:50 AM, MrCongeniality wrote:

A majority of democrats obviously voted yes on the bill, while the majority republicans said no. I heard it had something to do with "hurt feelings" on the republican side, but who gives a fuck about hurt feelings? Would you make our country pay for someone hurting your feelings? God, slit your wrists, fucking emos.

If you REALLY believe that they voted no because Pelosi "hurt their feelings" then you need to look into the situation more than you are. Many republicans AND democrats simply do not believe in writing a $700 billion check and give it to these huge institutions and personally I don't blame them one bit. This could set a precedence for the future, a BAD ONE.

Personally, my idea would be to round up the executives and CEOs of these companies responsible for this crisis, seize their assets, and use THAT to put a damper on the crisis. After all, they are the ones that got us into this mess in the first place. The problem is, if you allow these companies to be too big to fail, then they have no incentive to to cautious. They KNOW that if they do something risky (like taking out a large number of subprime mortgages for instance) and it backfires (like it did) then they know the government is gonna use taxpayers' dollars and rush to the rescue.

Or, if we DO give them this huge bailout, the executives should be forced out with no compensation. If i perform poorly at my job, I get fired with no severance package and probably end up losing my last check if I destroyed something. Why should these guys get to bring the economy crashing down because of a mortgage scheme and make millions when they leave?

Call your congressmen and tell them you do NOT want to give these big banks access to our treasury. Some people may say that the sky will fall if we let these companies fail, but I say the sky is gonna fall either way, do you want to see a few companies fall, or do you want to see America bankrupted by crooked politicians and their huge corporate supporters? You DO realize that these massive banks have political clout right? they are constantly lobbying the politicians to have laws passed that support them. They give them money and other gifts for their campaigns and god knows what else, and in the end, they do as the lobbyists, and not as the people, say.

Time to fight back!!!! You may contact your congressman/woman using this form to get their contact info. https://forms.house.gov/wyr/welcome.shtm l

and remember, let em know you will not be voting for them if they vote the way you do not want them to. They are SUPPOSED to represent YOU and NOT the banks!

Were not fucked...It's human nature to survive. We got through the last great depression and we'll make it through this one too.

It's alot to most people...Me myself couldn't even afford to come up with that kinda money.

I'm not against aid man, I'm against the idea that the government will once again give these guys money and not expect THEM to pay it back, that the taxpayer must.

Oh yeah cause 3000$ is soooo much

Ok i think dsome of you need to realise both how this credit crunch started and how it will affect the economy.

Firstly although the banks do hold about 70% of the blame for the mess for offering sub prime mortgages you also have to realise that alot (not everyone and yes i do realise thats not any reason to blame everyone else) of Americans chose to be stupid and get mortgages and loans that they had no chance of paying back altho for it to have the affect and lose banks the ammount it has then you have to realise thats still alot of people so for those who were partly to blame you have no excuses not disagree with the bill.

The next thing is that for everyone who thinks paying this money will mean higher tax increases yes it will but do you not understand how an economy works America the largest capitalist nation on earth I think you will find a hell of alot of the money in your economy comes from those greedy banks. If they begin to collapse all other businesses will collapse meaning that massive chunk of tax that comes from all these big businesses and i assure you its a hell of a lot more then the people pay individually in tax. Without this sort of money in your economy things that affect you more directly are gonna go right down just think of everything the government funds ok now imagine their budget is cut in half get the picture yet.

O and for those who were on about oil yes it may go down but do you really think OPEC are gonna start pumping this stuff for really cheap prices when the price falls they restrict how much they produce so no you aint getting all this oil for cheap you will be getting barely any oil until they can jack up the price again.

yep, I agree.
roll out your zombie plans, we're gonna need em in the days ahead.

At 9/30/08 10:26 PM, MattZone wrote: A purely Capitalist economy would have dreadful effects, notably on the environment. As for monopolies, they are only bad when they are protected by the government. Getting back to the issue at hand, the reason why I reject Federal aid for failing financial institutions is because doing so will cause far more harm to the system. It creates a moral hazard when rolling the dice and winning is rewarded, but rolling the dice and losing is also rewarded, or at least not punished. It encourages the players to take ever greater risks, until they sooner or later (usually sooner) take a risk that is so large that when they lose, even the House (the government and the taxpayers) won't be able to cover the bad bet. That is a very good way to trigger another Great Depression.

I do admit that banks should not be given free reign to make risky decisions, which could potentially have terrible consequences for the economy; in some ways a government bail out "saftey net" does promote this. However, i believe that in circumstances where a great depression seems imminent, aid should still be provided in order to retain that valuable basis for any economy - confidence. Confidence truly is key in ensuring a healthy and growing economy but the collapse of banks threatens this, reducing investment as well as reducing the number of day-to-day transactions of money, buying and selling, as people prefer to spend less in times of economic uncertainty. The loss of confidence is not something that can be reclaimed easy, and make take many years to get back. The rejection of the bail out led to loss of confidence and as we saw the stock market suffered heavily, as people wanted to keep their money out of an economy they saw as unstable. Just as confidence breeds confidence, lack of it does the same, and so the situation is likely to worsen. A government bail out, sends the right message to the people, even if its actual impact seems questionable. It ostensibly injects confidence back into the economy and this will help the economy to help its self as people keep investing, buying and selling (a sort of natural pump primping).

The issue of social dawarnism is not necessarily applicable to financial institutions, i'm sure that if the central bank performed inefficiently, we would not want the government to let it collapse. Instead we would want the government to protect the institution that is responsible for so many aspects of the economy. Without it depressions would be far more frequent. The point i am trying to make is that this is one area where we cannot let nature takes its course, there is too much at stake. All banks are liable to make a mistake at some point, if the government never protected them, how many banks would we be left with? These instutions can collapse in a day but can't spring up over night. Fewer banks means less choice, which is always bad for an economy; in order to keep the economy healthy we have to protect these institutions and retain confidence in them. If we want them to take fewer risks then regulate them, but do not let them fall.

At 9/29/08 10:23 PM, MattZone wrote: Wrong. The only banks that aren't "normal" companies are the Federal Reserve Banks, and they aren't in danger of failing. As for the rest of them, every single one of the banks in question could fail and all that would happen is that other banks would buy up the pieces.

That they create money, and channel investment makes them special companies; they are the backbone of every developed economy; it's not the same when a car factory goes bankrupt than when a bank does.

Before you start saying "Wrong" make sure you have achieved the title of Master; correct from wisdom, not ignorance.

They create a major contraction of the money supply, screw all those who had deposits in them, reduce the wealth of the nation, and make the whole economy crash.

Wrong on all four counts. First, none of these banks control the money supply,

They create money, ergo the "control" the money supply. I don't think they do it as a part of a major plan like the Fed, they merely follow their own interests. Of course, not as strongly as the Fed in their own, but they certainly have more power than the Fed all together. Don't you see how the liquidity injections are having no effect on the availability of loans?

the Federal Reserve Banks do. Second, all checking accounts, savings accounts, and money market accounts are FDIC insured, which means depositors won't lose a dime.

Third, "the wealth of the nation" is a meaningless phrase. It has nothing to do with the Treasury, or the Federal Reserve Banks, or GDP, or any other meaningful measure of economic stability or output.

That is merely your opinion.

Last, the whole economy does not depend on a few large banks. It doesn't depend on the housing market. It depends on three things: the goods and services that Americans produce, the amount of money issued by the Treasury relative to said goods and services, and the continuing consumption of said goods and services by both Americans and foreign buyers.

Which are all affected by the health of the financial system; don't you realize how financially-based the US economy is?

5) I can't buy a house.

And I really want a house >:(

As long as you maintain a good credit rating,

Banks have closed all of its mortgage loans due to the financial crisis.

or you simply save up enough to buy one,

With a 30% inflation rate? Sure.

it'll happen. The sky isn't falling.

Riesgo país: 1000 points.

At 9/29/08 10:59 PM, g0t wrote: Darwinism truly is a good way to describe this whole thing.

No serious person involved in social studies ever uses the term Darwinism. It's like naming your kid Adolf in Germany. Mastering a science includes using correct, accurate terms.

If they would've passed this bill, where do you guys think they would get this money from? Our pockets? Sure, maybe a little; however, they would probably print most of the money and cause a huge inflation, something the fed is notorious for doing.

??? The US has the lowest historical rates of inflation in the whole world; you only had double-digit inflation in the 70s, and it was due to a supply shock and an overly expansive fiscal policy.

WE need a depression again.2 wake some lazy ,rich motherefuckers up!!!

Bailout Accepted...we're not really that fucked.

Personally I think we should just murder alot of people around 5 million should do and the economy will stop it's problems. Or we just stop funding isreal it's all their fault anyways.

At 9/29/08 05:28 PM, morefngdbs wrote: Its already having a positive effect!

The price of oil has dropped over $10.00
Can gas prices be far behind?

I believed that the price of oil was related to demand and supply.

So the price of oil dropping simply means, less people have the money to buy cars, or drive cars, meaning less people spend the money on petrol and stuff.

So thats not a good thing, economy is coming to a stand-still? The recession? I dunno sorry I dont study these kinda things ..

Forgive me for double posting, but on the posts above me that metioned banks collapsing .. government-aided banks don't collapse. They just don't. It's not possible, unless a more severe Great Depression happens..

At 11/4/08 07:06 AM, Dejomel wrote: ...government-aided banks don't collapse. They just don't. It's not possible....

And that view is based on... what? About 70 years of lies from public officials saying it can't happen?

Governments collapse too. Three words: Former Soviet Union.

Don't think it can't happen here.