Here is an article about the spending bill tying up Congress these days. There is more than one controversy with it, but the biggest one seems to be about what looks to me like institutionalizing socialism for gigantic banks:
Remember the credit default swaps? Remember that awful bill where Congress handed a a $787 billion, no-strings-attached bailout to the banks in gratitude for their tanking the world economy? Some restrictions were put in place after that to prevent such things from happening again, but our friends in Congress already want to roll them back. The thing is a GOP idea, but it is interesting what kind of bi-partisan support it is getting, which means this isn’t another bash-the-GOP thread, unless you also want to ask the question, “Has Harry Reid been bought?”
I just can’t see the plus side of this one. It appears that banks would be allowed to make enormous and very risky bets on swaps, keeping the profits if things work out and socializing the losses if they don’t. The banks really screwed the pooch with this arrangement last time- labeling it socialism seems too nice. A license to rob the American people en masse- again- seems like a better description. How could they possibly merit such privilege?
Combine it with this one:
and we get a good look at how American oligarchy plays out. The wealthy will get an even more outsized influence over policy, leading to more and more provisions like the topic of this thread. Then all the mega banks have to do is make lousy bets and they can clean out the US Treasury. It almost seems to give the banks the power to destroy the government by making bailing them out more important than the people’s business.
I think these ideas together are craven and stupid, not to mention dangerous and un-American. But I put it right there in black and white above- I can’t see the plus side of this. Is there a sound defense of these provisions?
Calling it socialism is incorrect. The banks are socializing the risks and privatizing the rewards, which is just self-interest. Its also not corruption, because there isn’t necessarily any fraud or bribery involved.
Well, I see your point, All Along the Watchtower ;), but it’s closer to corruption than it is to socialism. It’s bending the public’s tools to a private self-interest rather than a general good or the social conscience.
Inasmuch as it is not actually against the law it is not corruption or bribery. Neat how the people writing the laws made it possible to pay them off legally.
Indeed look at what is also in the current budget bill:
It has all the hallmarks of bribery without it being “bribery” in a legal sense. As long as there is no explicit quid pro quo it’s all kosher. A wink and a nod is sufficient.
It doesn’t matter. Even if this provision was not passed, the “practical”, the “non-ideological”, the “bi-partisan”, and the “empirical” will all lie down for the banks next time they are in trouble, just as they have done countless times in history. The banks and their lapdog “economists” at the Fed and elsewhere will go onto CNN, Fox News, and NPR to convince the public how it is so necessary this time. Statists will gobble it up, and regurgitate it here and elsewhere. David Stockman will smash these critics once again, and so it goes.
“Ideological” opposition will be dismissed as cranks, holier-than-thous, right-wing extremists, dogmatic free-marketeers, and impractical capitalists.
I guess, but its a bit like saying an apple is closer to a dog than a rock (is that the worst analogy ever?). its not correct, just less wrong. It could be corruption, I suppose, if there was actual illegality, but there isn’t any evidence of that. There is of course the problem that one of the parties in this arrangement can redefine the law to legalize their conduct, but that still doesn’t make it legally corruption, even if it’s deeply unethical. I think the best word to describe this situation is crony capitalism.
Illegal doesn’t really come into play when we’re talking about acts of Congress since, yanno, they write the laws. Lawmaking must therefore be guided by principle, and this provision seems unprincipled for sure.
Interesting that so far, there is not one peep in support or defense of this provision. It is just something our wealthy overlords would like, and turning Congress into their private tool strikes them as an appropriate way to get it. Justification isn’t their thing. Cowardly and irresponsibly forcing the public to subsidize their gambling losses? Bingo.
There is a word worse than socialism for systems of government that actively intervene to favor businesses. Unfortunately that word also implies jingoism and totalitarianism so it wouldn’t be entirely appropriate to use right now.
Skimming the thread, it appears that the Left and the Right were both opposed to the bill. The Libertarians and the Socialists were both opposed to the bill. Liberals and Conservatives are opposed to the bill. I’m just a centrist but I also oppose the bill.
So the bill passed. :smack: Does anyone else need proof that the Congress, and most of the regulatory bodies, are bought and paid for?
Sometimes it seems like Congress should just be sold to the highest bidder. Quit wasting the voters’ time on shams; let FoxNews become a 24-hour rock-music channel. Did anyone else read Frank Norris’ The Octopus in high school?
No strings other than having to pay it back? Which they did, with interest. It doesn’t make it a good thing, and it doesn’t mean we shouldn’t make laws regarding swaps (although if you’ve been following the Dodd-Frank rulemaking it’s hard to argue that isn’t being done) - but it wasn’t no strings attached and I don’t see the benefit of mischaracterizing it as such.
If you’re interested in the other strings that were attached, you can read about some of them here:
You can read more about the repayment of the bailout here:
The claim that the U.S. government has shown a $46 billion profit on $613 billion is misleading. That’s a 7.5% profit over 6 years, which works out to a 1.2% annual rate of return – hardly a good return for toxic junk bonds and penny stocks. Ever wonder why Warrent Buffett or the King of Saudi didn’t come to the rescue? (Now, I’m misleading – the “profits” will increase as more loans are repaid, but some of the loans never will be.)
But more importantly, the reason that the taxpayer hasn’t been badly hurt, is because they were lending to big banks, profitable despite (or because of) their misdeeds. The big losers were NOT bailed out – various smaller investors, homeowners who lost their homes, etc. Of course, the too-big-to-fail banks recovered – they were the ones raking in illicit profits.
Your own Wikipedia link shows “As of late 2013, SIGTARP had pursued criminal charges against 107 senior bank officers, most of whom have been sentenced to prison.” I’m sure these cirminals were just the tip of the iceberg. (In fact, I think these are prosecutions of banks officials who misused post-2008 TARP funds, not the ones defrauding with both hands pre-2008.)
107 senior bank officials charged with crimes, just for defrauding TARP! How does that compare with the number of New York criminals selling loosies?
but I also oppose the bill.