Dear People Scared Of The (Big) Government

[camberiu]

Are you seriously trying to argue that over extension of credit wasn't a cause of the housing bubble? Seriously?

Are you seriously trying to argue that it is possible to crate a viable/enforceable/sane law that says: Don't lend to those who can't pay back?

 

[MikeMike]

> [background=rgb(252, 252, 252)]Are you seriously trying to argue that it is possible to crate a viable/enforceable/sane law that says: Don't lend to those who can't pay back?

Sure? 20% down payment, banks restricted to deposits & loans only, no loan made beyond marked-to-market value of collateral or bank's own capital? [/background]

 

[JamJam]

> We cannot be left to our own devices. We need laws to protect ourselves from ourselves. That’s what the government does.

There is no "government". Government is a collection of the same fallible individuals that you speak of. If "we" (individuals) are incapable of protecting ourselves, then "we" (government) are incapable of protecting others. Individuals frequently do both good & bad things. Same w/ the government. Yes, the government enforces child labor laws. Yes, the gov't also holds people in prison w/ out charge or trial, including torturing them, etc.

We do not need more government, we need (as a society) values that engender "doing the right thing" as often as possible.

Interesting points on society. But that society needs some way to teach and protect those values.

I'm no fan of massive government bureaucracy but neither am I a fan of slashing the state back to have no power all because we have a crisis caused by the banking elite who would profit from a weaker society with no values.

 

[Dublin2BuenosAires]

You won't answer the question. OK, that makes for a pretty boring discussion. Just a long exercise in obfuscation. Yours (I am mystified that this is difficult for you to comprehend) is quite straightforward.

Lending happens where the is an excess of funds and a bonus culture which create incentives to lend. Is it possible to create to law to tackle incentives, yes I believe it is. Is it possible to create law (regulation really...but OK, you want it to sounds 'big' govt...) which ensures that we aren't endlessly repackaging garbage and selling it as a financial sommodity...yes, it is. Is it necessary to separate consumer accounts (my money, your money etc) from investment accounts,...yes it is. This and a thousand other regulation can prevent excess funds being allocated without proper risk controls which would stem loss and interestingly enough create a real incentive to lend responsibly.

Still, please carry on trying to reduce the to big vs small, in your black and white world it's all very simple. The reality is that politics has no place in finance or economics, that's the downfall of it, dogmatists take over and leave the pragmatists to clean up their shitty mess.

 

[Dublin2BuenosAires]

> [background=rgb(252, 252, 252)]Are you seriously trying to argue that it is possible to crate a viable/enforceable/sane law that says: Don't lend to those who can't pay back?

Sure? 20% down payment, banks restricted to deposits & loans only, no loan made beyond marked-to-market value of collateral or bank's own capital? [/background]

What sorcery is this ?

 

[camberiu]

> [background=rgb(252, 252, 252)]Are you seriously trying to argue that it is possible to crate a viable/enforceable/sane law that says: Don't lend to those who can't pay back?

Sure? 20% down payment, banks restricted to deposits & loans only, no loan made beyond marked-to-market value of collateral or bank's own capital? [/background]

Unenforceable. You can explore thousands of loopholes. Brazil has even more "strict" banking standard and it has a MONSTER real estate bubble. We used to hear the same crap: It cannot happen in Brazil, our baking system is ultra-regulated. 30% minimum down payment. Banks cannot operate as hedge funds. No loan made beyond market value of the collateral Yada, yada, yada.

Then you inflate the evaluation of the collateral. People took short term loans or family loans for the 20% down payment. etc...

 

[camberiu]

Still, please carry on trying to reduce the to big vs small, in your black and white world it's all very simple. The reality is that politics has no place in finance or economics, that's the downfall of it, dogmatists take over and leave the pragmatists to clean up their shitty mess.

Where is that regulation Dublin? Since you make it sound so simple, where is it? Which country was able to publish such effective laws? All major countries indeed published tens of thousands if not hundreds of thousands of financial regulations. Where were they able to prevent those things we are taking about? Not in Europe for sure. Japan? Nope. America? Nope. South America? Definitely not. China? Their governmentally owned and highly regulated banking system is literally insolvent and the government there OWNS the banks. Show me an example of somewhere in which such regulation was viable.

 

[JamJam]

Where is that regulation Dublin? Since you make it sound so simple, where is it? Which country was able to publish such effective laws? All major countries indeed published tens of thousands if not hundreds of thousands of financial regulations. Where were they able to prevent those things we are taking about? Not in Europe for sure. Japan? Nope. America? Nope. South America? Definitely not. China? Their governmentally owned and highly regulated banking system is literally insolvent and the government there OWNS the banks. Show me an example of somewhere in which such regulation was viable.

Its obvious that things have to be regulated.
You can't justify your need for a smaller state. All you give it a longer waffly answer.

Isn't it funny we are only hearing yells for a smaller state since the crisis.

 

[Dublin2BuenosAires]

Where is that regulation Dublin? Since you make it sound so simple, where is it? Which country was able to publish such effective laws? All major countries indeed published tens of thousands if not hundreds of thousands of financial regulations. Where were they able to prevent those things we are taking about? Not in Europe for sure. Japan? Nope. America? Nope. South America? Definitely not. China? Their governmentally owned and highly regulated banking system is literally insolvent and the government there OWNS the banks. Show me an example of somewhere in which such regulation was viable.

OK, still not answering questions I see, deflections and misdirections ahoy.

Let's not play the where where where game...it never ends well for Libertarians.

Many of these regulations have previous been in place, pre-Glass Steagall. Many are in place as recommendations are unenforceable and there are others which have always been in place, were ignored and now where there is a stronger regulator in place (Ireland is a good example here) are actually being enforced. We'll have to wait and see what the effects are but it is glaringly obvious that deregulation caused the problem and implementation of new regulations is where we are headed (to differing extents in differing countries.

To date you haven't really answered a single questions so it's beyond my interest levels to reference any of these for you further than above.

We're done here, this isn't really for this forum.

 

[MikeMike]

Interesting points on society. But that society needs some way to teach and protect those values.

I'm no fan of massive government bureaucracy but neither am I a fan of slashing the state back to have no power all because we have a crisis caused by the banking elite who would profit from a weaker society with no values.

IMO if we make the claim that people can't take care of themselves, then, pulling from this same pool of people to staff a government that's supposed to do a better job doesn't make a lot of sense? Basically, if society in general is "immoral", then it's unlikely that a gov't derived from these same people will be "more moral".

Politicians in the US (I'm American so I'll comment on the US) as well as many other countries (e.g. Argentina) have shown themselves to be untrustworthy, and so why shift more responsibility to them? They're already doing a bad job?

IMO, one thing (of many possibilities) that does not require expansion of gov't, and that would likely have a net positive effect, would be to see people in power held accountable for the crimes they commit (banksters, etc). I would rather push for things like this than more government.

There are a number of other changes that could be made w/ out expanding gov't that would likely have a net positive effect, such as balancing spending vs. tax revenues, campaign finance reform, something to address pork barrel spending, reducing foreign military intervention, etc, etc.