# Socialist banks and the spending bill **URL:** \ **Category:** Great Debates\ **Created:** [December 13, 2014, 4:56am UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090 "2014-12-13T04:56:51Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [December 13, 2014, 4:56am UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/1 "2014-12-13T04:56:51Z")
[Here](http://www.bloomberg.com/news/2014-12-12/reid-urges-senators-to-agree-to-vote-on-spending-measure.html) 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: > [@](#): > > The banking provision, which prompted vehement opposition from Minority Leader Nancy Pelosi and other House Democrats and held up a vote yesterday, would let JPMorgan Chase & Co. (JPM), Citigroup and other lenders keep swaps trading in units with federal backstops. 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: > [@](#): > > The campaign provision would permit a tenfold increase in donations that individuals can make to national political parties each year, to $324,000 from $32,400. 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? ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [December 13, 2014, 5:25am UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/2 "2014-12-13T05:25:14Z")
Please don’t call this socialism. I’m a socialist, and this is not what we are for. It’s\* corruption,\* period, and equating socialism to corruption is bad rhetoric of a kind that makes real reform harder. ---
**Author:** ![The\_Joker\_and\_the\_Thief](https://avatars.discourse-cdn.com/v4/letter/t/e79b87/32.png) [@The\_Joker\_and\_the\_Thief](https://boards.straightdope.com/u/The_Joker_and_the_Thief)\ **Post date:** [December 13, 2014, 5:32am UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/3 "2014-12-13T05:32:16Z")
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. ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [December 13, 2014, 5:37am UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/4 "2014-12-13T05:37:24Z")
Well, _something_ gets socialized in all this, but I guess it is a mistake to say that something is ‘the banks’. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [December 13, 2014, 5:37am UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/5 "2014-12-13T05:37:55Z")
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. ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [December 13, 2014, 5:39am UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/6 "2014-12-13T05:39:54Z")
It isn’t normal capitalism, that’s for sure. ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [December 13, 2014, 5:54am UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/7 "2014-12-13T05:54:06Z")
Look at it in the context of the Gettysburg Address: > [@](#): > > Four score and seven years ago our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal. > > Now we are engaged in a great civil war, testing whether that nation, or any nation so conceived and so dedicated, can long endure. We are met on a great battle-field of that war. We have come to dedicate a portion of that field, as a final resting place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this. > > But, in a larger sense, we can not dedicate – we can not consecrate – we can not hallow – this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us – that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion – that we here highly resolve that these dead shall not have died in vain – that this nation, under God, shall have a new birth of freedom – and that government of the people, by the people, for the people, shall not perish from the earth. > > Abraham Lincoln > November 19, 1863 ‘All men are created equal’. ‘government of the people, by the people, for the people.’ I already said what it is: un-American. ---
**Author:** ![Whack-a-Mole](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/whack-a-mole/32/141_2.png) [@Whack-a-Mole](https://boards.straightdope.com/u/Whack-a-Mole)\ **Post date:** [December 13, 2014, 6:48pm UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/8 "2014-12-13T18:48:46Z")
> [@The\_Joker\_and\_the\_Thief](#): > > Its also not corruption, because there isn’t necessarily any fraud or bribery involved. 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: > [@](#): > > **Spending deal would allow wealthy donors to dramatically increase giving to national parties** > The Washington Post > > The language – inserted on page 1,599 of the 1,603-page bill – would allow individuals to give three times the annual cap on national party donations to three additional party committees set up for the purposes of the presidential conventions, building expenses and election recounts. > > That means that a donor who gave the maximum $32,400 this year to the Democratic National Committee or Republican National Committee would be able to donate another $291,600 on top of that to the party’s additional arms – a total of $324,000, ten times the current limit. > > In a two-year election cycle, a couple could give $1,296,000 to a party’s various accounts. > > SOURCE: [http://www.washingtonpost.com/blogs/post-politics/wp/2014/12/09/spending-deal-would-allow-wealthy-donors-to-dramatically-increase-giving-to-national-parties/](http://www.washingtonpost.com/blogs/post-politics/wp/2014/12/09/spending-deal-would-allow-wealthy-donors-to-dramatically-increase-giving-to-national-parties/) Or listen to a minute of Elizabeth Warren spelling it out earlier this week: [https://www.youtube.com/watch?v=H20Dhc85OhM&feature=player\_detailpage#t=256](https://www.youtube.com/watch?v=H20Dhc85OhM&feature=player_detailpage#t=256) 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. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [December 13, 2014, 11:04pm UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/9 "2014-12-13T23:04:51Z")
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. ---
**Author:** ![The\_Joker\_and\_the\_Thief](https://avatars.discourse-cdn.com/v4/letter/t/e79b87/32.png) [@The\_Joker\_and\_the\_Thief](https://boards.straightdope.com/u/The_Joker_and_the_Thief)\ **Post date:** [December 14, 2014, 12:03am UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/10 "2014-12-14T00:03:33Z")
> [@foolsguinea](#): > > 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. Glad somebody figured that out. 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. ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [December 14, 2014, 12:16am UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/11 "2014-12-14T00:16:23Z")
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. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [December 14, 2014, 4:10am UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/12 "2014-12-14T04:10:06Z")
> [@WillFarnaby](#): > > “Ideological” opposition will be dismissed as cranks, holier-than-thous, right-wing extremists, dogmatic free-marketeers, and impractical capitalists. Great. I can live with “crank,” and “holier-than-thou,” but “dogmatic free-marketer”? ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [December 14, 2014, 5:10pm UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/13 "2014-12-14T17:10:12Z")
I’m surprised it passed. The banks bought Congress! :eek: ---
**Author:** ![marshmallow](https://avatars.discourse-cdn.com/v4/letter/m/df705f/32.png) [@marshmallow](https://boards.straightdope.com/u/marshmallow)\ **Post date:** [December 14, 2014, 9:20pm UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/14 "2014-12-14T21:20:54Z")
> [@Try2B\_Comprehensive](#): > > It isn’t normal capitalism, that’s for sure. People decry the ills of crony capitalism, but that’s just normal capitalism. It was ever thus. ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [December 14, 2014, 10:57pm UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/15 "2014-12-14T22:57:13Z")
> [@Try2B\_Comprehensive](#): > > The banks really screwed the pooch with this arrangement last time- labeling it socialism seems too nice. > [@foolsguinea](#): > > Please don’t call this socialism. 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. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [December 15, 2014, 6:12am UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/16 "2014-12-15T06:12:47Z")
I suggested “corruption” and that was shot down. “Dirigisme” seems both too nice a characterization, and backwards, in this case. I still think it’s a kind of capitalist capture of the legislative process–and thus, corruption. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [December 15, 2014, 6:31am UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/17 "2014-12-15T06:31:41Z")
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? ---
**Author:** ![Darth\_Panda](https://avatars.discourse-cdn.com/v4/letter/d/ee7513/32.png) [@Darth\_Panda](https://boards.straightdope.com/u/Darth_Panda)\ **Post date:** [December 15, 2014, 2:51pm UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/18 "2014-12-15T14:51:03Z")
> [@Try2B\_Comprehensive](#): > > 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? 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: > **[Oversight of the Troubled Asset Relief Program](https://en.wikipedia.org/wiki/Oversight_of_the_Troubled_Assets_Relief_Program)** > > The Emergency Economic Stabilization Act created the Troubled Asset Relief Program to administer up to $700 billion. Several oversight mechanisms are established by the bill, including the Congressional Oversight Panel, the Special Inspector General for TARP (SIGTARP), the Financial Stability Oversight Board, and additional requirements for the Government Accountability Office (GAO) and the Congressional Budget Office (CBO). > The Financial Stability Oversight Board was created to review and mak... You can read more about the repayment of the bailout here: > [@](#): > > OUTFLOWS: $613 billion This includes money that has actually been spent, invested, or loaned. > \ > INFLOWS: $659 billion Money returned and paid to Treasury as interest, dividends, fees or to repurchase their stock warrants. > **[Bailout Tracker](https://projects.propublica.org/bailout/)** > > ProPublica is still tracking where every dollar of taxpayer money from the 2008 bailout of the financial system has gone. See for yourself. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [December 15, 2014, 3:46pm UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/19 "2014-12-15T15:46:32Z")
> [@Darth\_Panda](#): > > No strings other than having to pay it back? Which they did, with interest. 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? ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [December 15, 2014, 5:43pm UTC](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090/20 "2014-12-15T17:43:02Z")
Could we stop calling them “loosies”? How about, say, “tomndebbies” instead? Just a thought… [Next page](https://boards.straightdope.com/t/socialist-banks-and-the-spending-bill/707090.md?page=2)