Could it be the end of bailout nation?

[myp]

I was just watching the Kudlow Report (great rhetoric that man has) and he was talking about how the court order on the Fed to release loan information during the crisis as well as criticism of Senator Dodd from FDIC chairman Bair (more on that exchange here: http://www.businessweek.com/news/20...ckdoor-bailout-provision-faulted-by-bair.html ) could mean the end of "bailout nation" by essentially stopping any such bailouts in the future. Do you think it will happen?

As a free market capitalist, I dearly hope so.

 

[Dirk]

As a hardcore socialist with a fetish for justice and as a proponent of the interests of ordinary people, i very much hope not another bailout occurs.

 

[David]

As a hardcore socialist with a fetish for justice and as a proponent of the interests of ordinary people, i very much hope not another bailout occurs.

Ah, the sweet smell of the Right and Left in agreement! Love it.

 

[SpayAndNeuterLibs]

I was just watching the Kudlow Report (great rhetoric that man has) and he was talking about how the court order on the Fed to release loan information during the crisis as well as criticism of Senator Dodd from FDIC chairman Bair (more on that exchange here: http://www.businessweek.com/news/20...ckdoor-bailout-provision-faulted-by-bair.html ) could mean the end of "bailout nation" by essentially stopping any such bailouts in the future. Do you think it will happen?

As a free market capitalist, I dearly hope so.

I hope that bailouts will come to an end. If a business can't sustain its self it should go out of business. The American taxpayers shouldn't have the burden of the financial support of a failing company.

As far as do I think the bailout of failing businesses will come to an end? No, not without some drastic changes to the mentality of the elected officials and the American people.

 

[deanhills]

I hope that bailouts will come to an end. If a business can't sustain its self it should go out of business. The American taxpayers shouldn't have the burden of the financial support of a failing company.

As far as do I think the bailout of failing businesses will come to an end? No, not without some drastic changes to the mentality of the elected officials and the American people.

Pretty significant that the Government, which is basically insolvent on paper, would regard itself as competent to bail out failed businesses. Worse, that the people have not made a stipulation to the Government to report every cent that has gone into the bailouts. The people have to basically take the Federal Government to court to force it to discover what it has been up to?

 

[SpayAndNeuterLibs]

Pretty significant that the Government, which is basically insolvent on paper, would regard itself as competent to bail out failed businesses. Worse, that the people have not made a stipulation to the Government to report every cent that has gone into the bailouts. The people have to basically take the Federal Government to court to force it to discover what it has been up to?

Even after a court order, how can full disclosure be proven? If we can't trust them to follow the true meaning of the constitution, we could never assume that they would fully comply with a court order of full disclosure. There is just far too much corruption in the federal government. Even in state government.

 

[deanhills]

Even after a court order, how can full disclosure be proven? If we can't trust them to follow the true meaning of the constitution, we could never assume that they would fully comply with a court order of full disclosure. There is just far too much corruption in the federal government. Even in state government.

Surely if a mere mortal like me can see this, those in Government, or on the immediate sidelines of Government have to see it too? Why the apathy, why isn't someone doing anything about it? Like a Government who has less than zero dollars in its coffers, in fact as a large gaping black hole in its Bank, spending most of the last year debating a health bill that it cannot afford. Just the amounts that have to have been invested in the campaign of the bill, man hours in fighting through it, all the negotiations, it really does not make any sense!

 

[SpayAndNeuterLibs]

Surely if a mere mortal like me can see this, those in Government, or on the immediate sidelines of Government have to see it too? Why the apathy, why isn't someone doing anything about it? Like a Government who has less than zero dollars in its coffers, in fact as a large gaping black hole in its Bank, spending most of the last year debating a health bill that it cannot afford. Just the amounts that have to have been invested in the campaign of the bill, man hours in fighting through it, all the negotiations, it really does not make any sense!

Because it's not their intention to run a balanced budget or help the American people. It's no more then a grab of power, while in the process demonizing businesses for profiting form their efforts. Which in turn provides a false sense of justification for the socializing of areas of the free market.

 

[David]

I don't have a problem with bailouts considering they stabilize the economy (if done right) but if the gov't is going to use tax payer money to buy them out, then shouldn't the stock go to the taxpayers? I'd think the dividends from AIG, GM, Chrysler, ect. would more then make up the use of our tax dollars.

 

[myp]

I don't have a problem with bailouts considering they stabilize the economy (if done right) but if the gov't is going to use tax payer money to buy them out, then shouldn't the stock go to the taxpayers? I'd think the dividends from AIG, GM, Chrysler, ect. would more then make up the use of our tax dollars.

"Stabilizing" the market throughout bailouts is nothing more than moral hazard and arguably in the long-run causes less stability than the lack of bailouts.

As for the dividends, technically the taxpayers did gain from the companies that paid us back- the banks (GMAC, the GSEs, and some others haven't been able to pay us back, but the big banks all have.) The bailouts were not made in the form of stock purchase, but instead as loans and the government did get payments from the banks, with interest.

That does not mean it is right to use taxpayer money to create a moral hazard that in the long run might just cause more destruction (not to mention every company might not be able to pay us back as we are currently finding out with some of the bailed out corporations.)

 

[David]

"Stabilizing" the market throughout bailouts is nothing more than moral hazard and arguably in the long-run causes less stability than the lack of bailouts.

As for the dividends, technically the taxpayers did gain from the companies that paid us back- the banks (GMAC, the GSEs, and some others haven't been able to pay us back, but the big banks all have.) The bailouts were not made in the form of stock purchase, but instead as loans and the government did get payments from the banks, with interest.

That does not mean it is right to use taxpayer money to create a moral hazard that in the long run might just cause more destruction (not to mention every company might not be able to pay us back as we are currently finding out with some of the bailed out corporations.)

They gave loans to the banks, they bought stock in everything else (hanse the term, nationalization). About 80% of AIG as I recall.

 

[myp]

They gave loans to the banks, they bought stock in everything else (hanse the term, nationalization). About 80% of AIG as I recall.

Any assets they got are going to be held by the Fed or the government, depending on who bought them. Any dividends would also end up there. Just as the funds used were from the Fed/govt, the dividends are returned there. Technically the government is for the people, so they'd say its all for the taxpayer.

 

[David]

Any assets they got are going to be held by the Fed or the government, depending on who bought them. Any dividends would also end up there. Just as the funds used were from the Fed/govt, the dividends are returned there. Technically the government is for the people, so they'd say its all for the taxpayer.

And until I see my check, that's BS.

Look, I'm no fan of bailouts but if they're going to happen, and if it's done with my money, I want to see something other then numbers from a cooked book to show for it, preferably hard cash or property.

 

[myp]

And until I see my check, that's BS.

Look, I'm no fan of bailouts but if they're going to happen, and if it's done with my money, I want to see something other then numbers from a cooked book to show for it, preferably hard cash or property.

Well you aren't going to see that check Just as they didn't come to you specifically for a check for bailouts (just charged you generally with taxes and inflation,) they won't give you a check for it.

At the end of the day its nothing more than a moral hazard created by special interests and the idea that markets need to be saved.

 

[deanhills]

I don't have a problem with bailouts considering they stabilize the economy (if done right)

.... as well as being accounted for in a completely transparent manner. So far I have not seen one account yet of how the bailouts have been funded.

 

[David]

.... as well as being accounted for in a completely transparent manner. So far I have not seen one account yet of how the bailouts have been funded.

Thus I don't support the bailouts.

 

[deanhills]

Thus I don't support the bailouts.

Right, they probably are just an excuse for expensive pay offs?

 

[SpayAndNeuterLibs]

Bailouts will never help stabilize the economy. They tend to inflate the economy.

 

[Dirk]

.... as well as being accounted for in a completely transparent manner. So far I have not seen one account yet of how the bailouts have been funded.

I thought they were loans, which impact on the public deficit until they are paid back? :unsure:

Or was that just a few of them?

 

[SpayAndNeuterLibs]

I thought they were loans, which impact on the public deficit until they are paid back? :unsure:

Or was that just a few of them?

They may be called loans, but do you really think they will be paid back.:smug: