What to Do When Your Banking System Melts Down
Tags: Financial Crisis, Second American Revolution.
Click here to get Caucus of Corruption: The Truth About The New Democratic Majority by Matt Margolis and Mark Noonan.
Nevada Pundit cuts through a lot of the nonsense out there:
This is an issue that the government has had for 50 years, the result of which has caused an incoherent patchwork of regulations that are either confusing, outdated, irrelevant, over restrictive, or any combination of these. The answer to the problem isn’t more regulations, the answer is to find the right regulations that reflect the economy as it is today and regulations that allow the fluidity to adapt to the economy of tomorrow.
John McCain was right when he stated the fundamentals of the economy are healthy. Unfortunately, the one part of the economy that is not healthy is the banking industry, especially those banks that had assets heavily backed by mortgages. This is the one part of the economy has the ability to heavily influence all the other parts of the economy and so is a threat that could ruin those fundamentals that are sound.
I think that McCain was right that a 9/11 style investigation is needed, not to ferret out the wrongdoers, but to find ways to prevent the underlying causes that create these kind of problems. Only then can the government put into effect effective regulations that don’t overburden the business’s trying to create a strong economy but also don’t allow them to overreach themselves causing these types of collapses. The U.S. economy is the backbone of America’s power and can no longer afford to be governed by a patchwork series of regulations that are created by over zealous politicians. Reform is needed and John McCain is the person to bring about this change.
It occurs to me that nations which go on for any period of time tend to revamp their legal codes – things do tend to get jumbled, much the same way those kitchen drawers you carefully organized last year are a complete mess this year. Its human nature to take on tasks with an ad-hoc attitude – we do what works most conveniently at the moment and only some times relate our current action to the comprehensive life situation we are in. When you’re done washing the potato peeler you can carefully put it back in the drawer you got it from, or just toss it into the nearest drawer…and it works ok if you do that, though at times you might find yourself hunting around for the peeler when you would have found it instantly had you put it away properly…but, even then, you still get your peeler and thus your potatoes peeled…though, of course, there might come that day when for some reason you tossed it in the tool box in the garage and instead of mashed potatoes you’re having baked and you then go buy another peeler and then, naturally, find the other one and now you’ve got two…neither of which is needed all the time ’cause who has potatoes every day? Eventually the Mrs is on your case about what a horrific mess you’ve made out of the kitchen and you spend a weekend reorganizing it to heck and gone, and for a moment you feel like you’ve finally got things under control…until you finish washing the cheese grater and its proper place is all the way across the kitchen as opposed to the cupboard right next to you…
See how it works?
So it is with government regulations – this or that thing happens and thus and such law or regulation is enacted to deal with it but its not like anyone really knows all of the laws and regulations so the one you just did may or may not fit neatly into the rest and this, in turn, makes it necessary to kinda twist things around so that all the regulations and laws at least sorta-work and, meanwhile, those who are really in the know have figured out how to drive a Mack truck through loopholes in the regulations and thus use the banks and government agencies as private piggy banks for all manner of nonsense until one day you wake up to find that 500 points are knocked off the DOW and Mr and Mrs Taxpayer are told they’ll have to pony up billions to rescue banks which once upon a time were worth billions but are now worth about as much as Monopoly money.
Here lies McCain’s very strong advantage over Obama – McCain has been out front on this issue and is known far and wide as a man with little sympathy or patience for the malefactors of great wealth (government and private) who cruise through the American economy, leeching of the productive sectors and who always manage to come out rich no matter how badly they put the ship of State up on the rocks. Obama, meanwhile, is hip deep in the politicians and business people who exploited the screwed up mass of laws and regulations – coupled with Democrat-led “oversight” which amounted to “do whatever you want, as long as we get juicy donations and other swag out of the deal” – which allowed our current financial crisis to occur. McCain can forcefully call for reforms and he’d be well served to call for a complete reworking of our financial system laws and regulations to ensure that they reflect current realities and protect the American people and the American economy from those business people and politicians who view America as a cow to be milked for all its worth.
We Republicans believe in free markets – but we must recognize that markets aren’t entirely free when well-connected people are allowed to game the system. Furthermore, it is required of us that we come up with the comprehensive fix for the problem in order to forestall a liberal attempt to merely inject more government into the system, thus just perpetuating the current confluence of money and power which created the problem to begin with. We do need change we can believe in – and its unbelievable to think that Obama can deliver in the face of the entrenched political and money interests who back his candidacy.
Thank you for visiting Blogs For Victory. If you enjoy our content, please consider making a donation to help us cover the costs of our servers.Mark Noonan is co-author (with Matt Margolis) of Caucus of Corruption: The Truth About The New Democratic Majority. He also blogs at Nevada News and Views. Follow Mark on Twitter.
16 Responses to “What to Do When Your Banking System Melts Down”
Caucus of Corruption
Oh. My. God.
Can we please, please, please elect someone who recognizes that restructuring and re-regulating the United States banking system is a more complex problem than organizing kitchen utensils, and that the two problems are in no way analogous?
We need a president who graduated at the top of his class, not the bottom! God help us if McCain gets elected.
Can you say “Phil Graham”? What do you do about the greed where there are no regulations in place to control unethical behavior?
All we need to fear, is fear itself. Who said that, and why?
yekept,
How will raising the capital gains tax help you think?
Do you really want to go there, Sunny? PS It’s Gramm, not Graham.
Democrats Blame Phil Gramm; Ignore 89 Other Senators, Including Joe Biden, Who Voted For Same Bill
http://campaignspot.nationalreview.com/post/?q=YmFmOTNlYmMwYTgyYjA1NTZiMDY2ZTk5ZDYyNGJhZjE=
Sunny, your comment (#2) is a prime example of something you do with relative frequency. I don’t know whether your comments here are a school assignment from a liberal professor or something you read somewhere else that just sounded good to you that you didn’t bother to fact-check. Very few of your comments ever seem to have more than a hint of personal conviction, and often they contain less than a hint of fact. They’re rarely nasty and condescending like most of the other brain-dead Lefties who post here, though, and I sense that you don’t really believe what you write. But you seem compelled to write things that you know are contrary to what the Conservatives here believe. I don’t know — I’m just trying to figure you out, because I sense that you’re really a pretty decent person. You just believe some things that, IMHO, are wrong-headed, and you often support your beliefs and opinions with information that is less than factual. I guess I’m rambling a bit here, but you strike me as someone who is worth educating.
I think McCain’s time with the esteemed Keating 5 shows that he’s a real maverick with an unassailable plan. Can I start a chant here?
Free the Keating 5! Free the Keating 5!
You are right, your drawers are jumbled. Good to see economic experts that you are tilting at windmills. You have absolutely no idea.
The real free market solution wouldn’t care about how this mess is going to be resolved. It would just stand back and let it go. Funny though, this free market adminsitration has now been responsible for some of the biggest bail outs of all time. Ultimately, if this insurance giant was allowed to fail who would make payments on all the claims that AIG was responsible for. Or would we tell those who insured with them “too bad”
Not wanting to have such a disaster hanging over the country at election time Bush punted. Now he’s hoping the whole thing can be forstalled long enough for him to move to somewhere like Hong Kong or Dubai and get the hell out of Washington. The rest of us will have to stay and ride it out. Hopefully I am wrong and its much better than I have imagined to be.
yek,
You lack any sense of humor or any ability to think outside leftwing talking points, don’t you?
cam,
Its a financial crisis – such things happen, and are usually traceable, in the end, to government. But what needs to be done is some stop gaps to prevent panic, and then prevent Obama from getting in the White House and imposing tax increases and protectionism which will turn a financial crisis into a Great Depression.
Mark,
Once again I don’t think you have any idea what you are talking about. You just continue to go to the well of “its the Democrats fault”.
Its amazing that you would call this stop gap. It is the largest bail out ever. Its time you admitted that we all are interconnected and that government should remain involved in a constructive way or you should stand by your principles of free market capitalism. Which one is it? Or is it a case of privitizing the gain and socializing the risk?
If you are principled, now is the time to stand up and be counted. Otherwise, you are just a political opportunist just like the man you support, the man who first opposed the buyout of AIG and then supported it when he realized the implications of the free market hands off approach.
cam,
Looked through my entry and didn’t see “Democrats are at fault” in there anywhere – what I’m looking at in this mess is a nauseating pile of government/usurious bank/hack politician bullpoop and trying to find a way to get to what I want – which is as many American citizens as possible independent of corporate and government America. Obama is very literally more of the same – his solution will be to just get government more involved which means even more corruption and legalized usury. McCain isn’t coming in to cleanse the Temple, but he’s a damn sight better than the alternative – at least with McCain I’ll have a shot at the desired outcome, and with Palin in the pipeline and Jindal following after, I’ve got a chance of as much as 24 consecutive years of Executives not enslaved to the status quo.
You speak to me of socializing the risk as if this is something new, or that socializing the profit even more than currently will be an improvement. Shift you paradigm (to use an annoying modernism) – you’re looking at things the wrong way and are assuming that liberals and corporate executives are on opposite teams and that conservatives are tools of corporations (some are, but they are the exceptions which prove the rule)…
Do you want to understand where the money came from which Fannie, Freddie and the rest of the failed banks played with? From your social security taxes – you on the left screamed to high heaven that privatizing SS would be to “gamble” our money in the stock market…well, you won that argument and it was kept “safe” in government hands, and provided the fiscal wherewithall to underwrite, for a time, a bonanza of home buying, until the market got saturated with speculation and burst…and now the money you proposed to save by keeping it in government hands is now being used to bail out the government-favored banks.
Had you let the people keep their money then it would be safe in 401ks and IRAs (yeah, I know the 401k has taken a hit this year – but even with the last year of crap performance, I’m still getting a 3% return over the past three years…and, as usual, if you take the long term then I’m getting about 8% per year, and as I understand such things as “dollar cost average”, I’m still sitting pretty as my contributions are just buying stocks dirt cheap right now which will then go up all that much more on the rebound). The lesson: keep your money under your own control, it is your eventual means of becoming independent…no, not a bazillionaire, but a person who is beholden to no corporation or bureaucracy and who makes his own decisions without let or hindrance from anyone.
Once upon a time the ideal was for each man to own his own farm and work for himself – well, liberals, capitalists and government types convinced us to chuck all that in favor of being crowded into cities where we could become a large labor and consumer pool…we can’t go back, but we can go forward…and forward to a day when “worker capitalists” run the show and use the free market economy to de-facto become independent smallholders..
Hilarious reading of the situation and even funnier solution. Are we talking about the same Republican Party? You know, the one with the lengthy legislative record, platforms, etc?
Liberals convinced us to move to cities? My God, that is the stupidest thing I have read in at least a year, and I read a lot, even this blog.
Liberals convinced us to move to cities?
Yeah, I liked that one, too. It’s such an odd fight to pick, but here he is picking it. It’s not entirely clear how this fits in with the overarching Mark Noonan Conspiracy Theory of Liberals, but I’m sure we’ll learn about it as time goes on.
Also, did the damn dirty liberals make you move to Las Vegas, Mark? How is a man of such alleged tough character so easily cowed?
Mark,
You seem more confused than ever. Please try to clarify what is you ar trying to get at. The best I could see from your whirling durbish of an argument is that you are disappointed with the concept of living in a city and that you look forward to the day that everyone will become “worker capitalists” who run the show. By what means will “worker capitalists” run the show as you put it? And what do you mean by that?
If coporations are still in existence they will certainly not let go of the power they currently wield. Not unless the rights that were ceded to them by the court are eleiminated. Even then, it would be difficult. Further, without true campaign finance reform, corporations will always be able to buy campaigns. Ultimately, the focus of true reform must be achieving rights for individual voters over special interests. Each voter should be given the same access to government. Equivicating money with free speech is a mistake. And giving coorporations the same constitiutional rights as individuals is also a mistaken interpretation of the Constitution.
Mark writes,
“Do you want to understand where the money came from which Fannie, Freddie and the rest of the failed banks played with? From your social security taxes”
Um, please cite this one. Social Security taxes are kept separate from all other government revenue. That money cannot be touched by the government.
You have it backwards, Noonan. What would happen if Americans invested their social security in the stock market? Right about now there would be a panic and many of those novice investors would pull their money out and lose a large portion of their retirement.
Mark also writes,
“I’m still sitting pretty as my contributions are just buying stocks dirt cheap right now which will then go up all that much more on the rebound). The lesson: keep your money under your own control, it is your eventual means of becoming independent.”
Yes and no. Assuming you are earning 8% per year you also need to look at the rate of inflation. As inflation goes up your money is less valuable.
What happened today with the bailout essentially devalued any earnings you got on your 401K (assuming you do not own large sums of gold). As inflation rises you will need to constantly earn a better return on those investments just to keep the 10% return you likely hope for. This is no small feat.
Also, you do understand that 401Ks usually invest in the stock market right? They are a replacement for pension plans.
So, if your 401K had a lot of Lehman or AIG in it this week, you are screwed. You make the assumption that everyone does well investing their own money. Hopefully you do not learn the hard way that this assumption is incorrect.
Corporate America has long suffered from short term rather than long term forecasting. I think all of us can agree on that. The real problems this time around was that the fatcats at the top combined short term gain with personal gain. The health of the company was ignored. Overpaid CEOs were given too much power. The only ones who could override them were the boards of directors, and they were pretty much all politically connected to the CEOs. I work in the financial service industry. The executives have no soul, are ruthless, and are adept at running companies into the ground while profiting handsomely. Those at the top of corporate America are weasels who rose by playing political games and claiming the credit of others’ work, not entrepeneurs or men of vision or even skilled managers. Some of these schmucks should be doing hard time.