# Let Me Help, Mr. Bernanke. **URL:** \ **Category:** Great Debates\ **Created:** [August 28, 2010, 3:16pm UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792 "2010-08-28T15:16:51Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![adhay](https://avatars.discourse-cdn.com/v4/letter/a/ecd19e/32.png) [@adhay](https://boards.straightdope.com/u/adhay)\ **Post date:** [August 28, 2010, 11:40pm UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/21 "2010-08-28T23:40:56Z")
> [@gonzomax](#): > > Banks are not lending ,which would stimulate the economy, because they are guaranteed profit by buying bonds. They get money for free and no risk bonds assure them of risk free profits. > Obama should have taken over a bank and began lending after the crash. Piling the money into the banks was a mistake like cutting taxes to the wealthy. They have lots of money. More won’t change a thing. They just pile it deeper and do nothing. Are you a Marxist? Nothing personal. Just asking. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [August 28, 2010, 11:42pm UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/22 "2010-08-28T23:42:23Z")
> [@adhay](#): > > Wait a sec. How about the The Golden Rule, along with it’s negative, Thou shall not do unto your neighbor what you would not have done unto you. That about covers it. Good plan. I wouldn’t want my neighbor to break into my house and take the things I’ve earned because HE thinks someone else deserves them more. So I won’t do it to him, either. We can all leave each other alone and treat each other with respect. Somehow I’m thinking that’s not what you had in mind. ---
**Author:** ![adhay](https://avatars.discourse-cdn.com/v4/letter/a/ecd19e/32.png) [@adhay](https://boards.straightdope.com/u/adhay)\ **Post date:** [August 28, 2010, 11:55pm UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/23 "2010-08-28T23:55:36Z")
> [@treis](#): > > > [@adhay](#): > > > > And? > > > > As I see it, a guaranteed profit of 12 to 18% per year on money invested in local economic/social improvement might bring some money out of the woodwork. All that is asked in return is complete transparency. > > How are their profits guaranteed? If the debtors don’t repay their loan will the Feds pick up the tab? > > > [@Really Not All That Bright](#): > > > > That’s what I don’t get. The sub-1% prime rate doesn’t seem to be doing much other than earning the banks money. Why not raise it? At least the banks will be forced to start trying to increase their returns. > > If the banks start having to pay for the money they loan they will need to either (1) reduce the risk of the loans they issue or (2) raise interest rates. Neither of those is a desirable situation at this point. There was a time when promissory notes ruled. Borrow $1000 from your best banker friend/relative. Sign on for 6%/year vig until the principal is paid. Simple, clean and socially productive. ---
**Author:** ![adhay](https://avatars.discourse-cdn.com/v4/letter/a/ecd19e/32.png) [@adhay](https://boards.straightdope.com/u/adhay)\ **Post date:** [August 28, 2010, 11:59pm UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/24 "2010-08-28T23:59:20Z")
> [@Sam\_Stone](#): > > > [@adhay](#): > > > > Wait a sec. How about the The Golden Rule, along with it’s negative, Thou shall not do unto your neighbor what you would not have done unto you. That about covers it. > > Good plan. I wouldn’t want my neighbor to break into my house and take the things I’ve earned because HE thinks someone else deserves them more. So I won’t do it to him, either. We can all leave each other alone and treat each other with respect. > > Somehow I’m thinking that’s not what you had in mind. I, for one, respect you. How would you guide the Fed, were you the Decider? ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [August 29, 2010, 12:17am UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/25 "2010-08-29T00:17:16Z")
I don’t think the Fed should be an active manager of the recession. I think proper Fed policy should be to provide as stable financial system, and let the economy rise and fall on its merits. The fed should only intervene to prevent a financial crisis, not to boost GDP or try to create jobs. ---
**Author:** ![MOIDALIZE](https://avatars.discourse-cdn.com/v4/letter/m/e274bd/32.png) [@MOIDALIZE](https://boards.straightdope.com/u/MOIDALIZE)\ **Post date:** [August 29, 2010, 12:50am UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/26 "2010-08-29T00:50:13Z")
> [@Sam\_Stone](#): > > I don’t think the Fed should be an active manager of the recession. I think proper Fed policy should be to provide as stable financial system, and let the economy rise and fall on its merits. The fed should only intervene to prevent a financial crisis, not to boost GDP or try to create jobs. That’s nice, Sam, but it really doesn’t matter what you think, as one of the Fed’s duties is > [@](#): > > conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates. > **[About the Fed](https://www.federalreserve.gov/aboutthefed.htm)** > > The Federal Reserve Board of Governors in Washington DC. Seeing as how unemployment is high, disinflation is trending towards outright deflation, and long-term interest rates are falling ever lower, it doesn’t seem like they’re doing their job. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 29, 2010, 1:00am UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/27 "2010-08-29T01:00:31Z")
> [@adhay](#): > > > [@gonzomax](#): > > > > Banks are not lending ,which would stimulate the economy, because they are guaranteed profit by buying bonds. They get money for free and no risk bonds assure them of risk free profits. > > Obama should have taken over a bank and began lending after the crash. Piling the money into the banks was a mistake like cutting taxes to the wealthy. They have lots of money. More won’t change a thing. They just pile it deeper and do nothing. > > Are you a Marxist? Nothing personal. Just asking. No. I just believe the reason we have a government is to protect the powerless and weak from those who will alter the entire government to enrich and empower themselves. That is what is happening. The people have no power to stop the corporations from becoming oligarchies and dominating the industries. They merge and buy up the competition killing any push for innovation and competition. The direction we are moving in is bad for America as it was envisioned. ---
**Author:** ![adhay](https://avatars.discourse-cdn.com/v4/letter/a/ecd19e/32.png) [@adhay](https://boards.straightdope.com/u/adhay)\ **Post date:** [August 29, 2010, 1:16am UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/28 "2010-08-29T01:16:26Z")
> [@gonzomax](#): > > > [@adhay](#): > > > > Are you a Marxist? Nothing personal. Just asking. > > No. I just believe the reason we have a government is to protect the powerless and weak from those who will alter the entire government to enrich and empower themselves. So what do you like on your apple pie, Mom, cheddar or ice scream? > [@](#): > > That is what is happening. The people have no power to stop the corporations from becoming oligarchies and dominating the industries. They merge and buy up the competition killing any push for innovation and competition. The direction we are moving in is bad for America as it was envisioned. Now what? ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 29, 2010, 3:57am UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/29 "2010-08-29T03:57:41Z")
Most of you are too young to remember competition. At one time we had lots of oil companies. There were different brand stations all over the place. Gas was cheap. Stations were continually undercutting each other. When you filled up ,you got green stamps , cups and glasses ,or silverware with it. So they merged and bought each other out until the whole industry is easily controlled by the big boys. Do you think there is a difference in pricing between Walmart, Kmart and Target? Do you think they offer different goods? Those days are long gone. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [August 29, 2010, 4:49am UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/30 "2010-08-29T04:49:01Z")
Are you seriously putting forth the assertion that the reason the price gas at the pump is so ‘high’ (that alone is a joke) is because of a lack of competition? That this is the main factor?? Seriously? Or am I mis-underhearing whatever obscure point you are trying to make, gonzo? -XT ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 29, 2010, 9:05pm UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/31 "2010-08-29T21:05:08Z")
Lets make it simple. They do not compete. They buy out the competition or merge with it. They control the regulators, the politicians and the market. They would never let their profits and wealth be subject to vagaries of a free market. It is the tendency of any enterprise to control competition. They make more money that way. That is why we have trust busting laws and are supposed to have vigilant watch dogs. We don’t. They are bought and sold. You have never seen competition. Competition and a free market place are good for the consumer and bad for maximizing profits. Therefore we have a market controlled by the industries themselves. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [August 29, 2010, 9:38pm UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/32 "2010-08-29T21:38:50Z")
Why don’t you keep it even simpler and simply answer my question? -XT ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 30, 2010, 2:32am UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/33 "2010-08-30T02:32:03Z")
> [@xtisme](#): > > Why don’t you keep it even simpler and simply answer my question? > > -XT We have played this game before. You gobble up sophistry like it is mothers milk. It makes you feel all warm and secure. Yes indeed in our normal lives we encounter very little competition. We see markets split up. We see similar prices in most things. Real price wars were before your time. But corporations hate competition. It makes them work harder, innovate and they make less money. Consumers get products that are better and better, They get them cheaper. The Sherman anti trust laws helped for a while like the Teddy Roosevelt trust buster days. Sometimes we recognize the damage done to the country when we have monopolies Occassionally we break up a company for dominating a market to assist the country and increase competition. that did not happen when Bush was in. It has become increasingly rare. Now is the time to bust up a few monopolies. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [August 30, 2010, 2:49am UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/34 "2010-08-30T02:49:15Z")
[QUOTE=gonzomax] We have played this game before. You gobble up sophistry like it is mothers milk. It makes you feel all warm and secure. [/QUOTE] I’ll take that as a ‘no’…you aren’t going to answer my question. Thanks for playing. > [@](#): > > Yes indeed in our normal lives we encounter very little competition. We see markets split up. We see similar prices in most things. Real price wars were before your time. But corporations hate competition. It makes them work harder, innovate and they make less money. Consumers get products that are better and better, They get them cheaper. So, in a round about way, you ARE saying that you think the price of gas today is ‘high’ primarily due to the fact that there is less competition. > [@](#): > > The Sherman anti trust laws helped for a while like the Teddy Roosevelt trust buster days. Sometimes we recognize the damage done to the country when we have monopolies Occassionally we break up a company for dominating a market to assist the country and increase competition. that did not happen when Bush was in. It has become increasingly rare. Now is the time to bust up a few monopolies. Standard Oil and TR were before your own time as well. Out of curiosity (not that I REALLY expect an answer from you), but who is this monopoly that controls the price of gas at the pump in the US and that flourished under Bush? Granted, the OPEC cartel DOES control, to an extent, the price of oil by controlling or influencing production, but they aren’t exactly American controlled, and Bush (or any other American president) don’t exactly have a lot of control of them (and I doubt that’s who you are talking about in any case), so who is this monopoly of which you speak? -XT ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 30, 2010, 3:38am UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/35 "2010-08-30T03:38:08Z")
> [@adhay](#): > > Fed chairman in the NYT. [http://www.nytimes.com/2010/08/28/business/economy/28fed.html?partner=MYWAY&ei=5065](http://www.nytimes.com/2010/08/28/business/economy/28fed.html?partner=MYWAY&ei=5065) > > I have a suggestion based on the following observations. > > Much private debt is the result of overspending on houses during our so-called housing boom. And on taking equity out of houses bought before the boom which had theoretically risen in price. > [@](#): > > And it is compounded in our public debt in our bailouts of the very institutions that made the “sub-prime” loans which collapsed the system. In other words, institutionalized corruption in the form of “incompetent” govt regulation of banks and other corporations which ended up profiting the profiteers and continues to do so. Not accurate. The companies which made the subprime loans - WaMu, Countrywide, died and got bought for low prices. They did not get bailed out. The companies who did get bailed out bought and issued paper based on these loans which were given higher ratings than justified. I’m not sure I’d call the lack of regulation incompetent - it was against the right wing philosophy of the Bush administration and Greenspan.What was incompetent was being so blinded by their beliefs that they couldn’t see what was coming - but pure free marketers denied, as a matter of faith, that the disaster which was against the best interest of the banks could occur partially because of the actions of the banks. > [@](#): > > I think most American’s agree that anyone here is entitled by right to affordable food and shelter. Let’s get people off the streets. Someone who is eating regularly and has a safe place to sleep is much more likely to look for a job and find one. And even if he doesn’t, society as a whole is better off without people sleeping in doorways. IMHO. > > Likewise, society is better off if poor families can AFFORD to move into their own homes rather than pay to live in slums. It might give the slumlords incentive to be more responsive to the needs of their tenants, a kind of privately funded urban renewal. And it would bring some reality to house prices. I’m not sure everyone is ready for a house. I’m not sure the housing stock is in the right place for the people who would be benefited by your plan. But we can ignore that and only worry about those for whom it is right. > [@](#): > > But how. Easy. > > Offer free loans to any bank which offers the money to the private and public housing markets and, perhaps, the small business market at 6%, simple interest and whose board of directors will take personal responsibility for a yearly audit **of those loans**. To sweeten the pot, after a successful audit, the bank receives a Fed “free loan” equal to (double?) it’s profit on those loans. After that, it’s between the board and it’s investor’s how the money is distributed. > > For riskier enterprises, set a high prime rate and let the banks use private capital with minimal govt oversight. I believe the investors will take over the job, perhaps even demand some accountability. Would this involve the banks not being allowed to sell the mortgages to others? How would even more profit mitigate the downside risk of the new homeowners defaulting? Forcing the banks to recognize their devalued assets now would work better, with a renegotiated loan that would bring the house from being underwater, with the bank getting a good slice of any upside movement in the price. Right now when they are getting around to foreclosing they are putting more properties onto a weak market, depressing prices more and locking in their losses. But this would reduce the bonuses of the bank execs, so I don’t expect it to happen any time soon. ---
**Author:** ![Der\_Trihs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/der_trihs/32/233_2.png) [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)\ **Post date:** [August 30, 2010, 3:56am UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/36 "2010-08-30T03:56:22Z")
> [@adhay](#): > > Likewise, society is better off if poor families can AFFORD to move into their own homes rather than pay to live in slums. That’s highly debatable. Where are we going to get all the land for those new homes? Who’s going to build them and pay for them? How are we going to afford all the new infrastructure and so forth? How are they going to pay for the upkeep? Yes, it would certainly be better for them to live in nicer apartments; but individual homes are both more wasteful and take up much more room. What are we going to chop down or demolish to make room for them? ---
**Author:** ![adhay](https://avatars.discourse-cdn.com/v4/letter/a/ecd19e/32.png) [@adhay](https://boards.straightdope.com/u/adhay)\ **Post date:** [August 31, 2010, 12:28am UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/37 "2010-08-31T00:28:42Z")
> [@Der\_Trihs](#): > > > [@adhay](#): > > > > Likewise, society is better off if poor families can AFFORD to move into their own homes rather than pay to live in slums. > > That’s highly debatable. No shit? > [@](#): > > Where are we going to get all the land for those new homes? Who’s going to build them and pay for them? How are we going to afford all the new infrastructure and so forth? How are they going to pay for the upkeep? Basically, the rich donate their third home, with staff, to the poor. A 5 br, 5.5 bath dorm with a view. Sweep the streets and put the first ten on the sofa with a beer in their hands. Crimes founded on need? Who needs them? ---
**Author:** ![Der\_Trihs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/der_trihs/32/233_2.png) [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)\ **Post date:** [August 31, 2010, 12:50am UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/38 "2010-08-31T00:50:17Z")
[quote=“adhay, post:37, topic:551792”] > [@Der\_Trihs](#): > > > [@](#): > > > > Where are we going to get all the land for those new homes? Who’s going to build them and pay for them? How are we going to afford all the new infrastructure and so forth? How are they going to pay for the upkeep? > > Basically, the rich donate their third home, with staff, to the poor. A 5 br, 5.5 bath dorm with a view. Sweep the streets and put the first ten on the sofa with a beer in their hands. > > Crimes founded on need? Who needs them? :rolleyes: That’s just silly. How will the poor in question maintain the place? What makes you think that a random ten people will want to live there? Or that it has ten bedrooms? what makes to think there are enough rich people for that to make a dent? ---
**Author:** ![adhay](https://avatars.discourse-cdn.com/v4/letter/a/ecd19e/32.png) [@adhay](https://boards.straightdope.com/u/adhay)\ **Post date:** [August 31, 2010, 12:53am UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/39 "2010-08-31T00:53:12Z")
[quote=“Der\_Trihs, post:38, topic:551792”] > [@adhay](#): > > :rolleyes: That’s just silly. How will the poor in question maintain the place? What makes you think that a random ten people will want to live there? Or that it has ten bedrooms? what makes to think there are enough rich people for that to make a dent? Have you recently come into some money, Red Shirt? ---
**Author:** ![Der\_Trihs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/der_trihs/32/233_2.png) [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)\ **Post date:** [August 31, 2010, 12:55am UTC](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792/40 "2010-08-31T00:55:44Z")
> [@adhay](#): > > Have you recently come into some money, Red Shirt? No, not that its any of your business. My opinion has nothing to do with any (_very_) hypothetical concern for the wealthy on my part, but on the fact that your “solution” is silly and unworkable. [Previous page](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792.md?page=1) [Next page](https://boards.straightdope.com/t/let-me-help-mr-bernanke/551792.md?page=3)