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(The Big Picture)   Brief history of how lobbyists and banks whittled away at Glass-Steagall over time until it was gone. Kind of like Lisa and Bart saying "Can we have a pool, Dad?" until Homer relents   (ritholtz.com) divider line 74
    More: Stupid, national banks, commercial paper, OCC, Muni, government debt, Greenspan, bank holding companies, Smith Barney  
•       •       •

1942 clicks; posted to Business » on 17 May 2012 at 9:58 AM (3 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-05-17 09:35:26 AM  
'Tis a fine barn, but sure 'tis no pool, English
 
2012-05-17 09:51:07 AM  
"Kippers for breakfast, Aunt Helga? Is it St. Swithin's Day already?"
 
2012-05-17 10:02:13 AM  
Don't remember a pool, but I do remember Mt Splashmore.

Bart/Lisa: Will you take us to Mt. Splashmore?
Homer: No!
Bart/Lisa: Will you take us to Mt. Splashmore?
Homer: No!
Bart/Lisa: Will you take us to Mt. Splashmore?
Homer: No!
Bart/Lisa: Will you take us to Mt. Splashmore?
Homer: No!
Bart/Lisa: Will you take us to Mt. Splashmore?
Homer: No!
Bart/Lisa: Will you take us to Mt. Splashmore?
Homer: No!
Bart/Lisa: Will you take us to Mt. Splashmore?
Homer: No!
Bart/Lisa: Will you take us to Mt. Splashmore?
Homer: No!!
Bart/Lisa: Will you take us to Mt. Splashmore?
Homer: No!!!!
Bart/Lisa: Will you take us to Mt. Splashmore?
Homer: No! No! No! NOOO! If I take you will you two shut up and quit bugging me!
Lisa: Yeah of course!
Bart: Well?
Bart/Lisa: Will you take us to Mt. Splashmore?
Homer: YES!
Bart/Lisa: Thanks, dad!
 
2012-05-17 10:03:40 AM  
Hey Dimon! Your epidermis is showing!
 
2012-05-17 10:15:23 AM  

AiryAnne: Don't remember a pool, but I do remember Mt Splashmore.


They did it for a pool as well, in Bart of Darkness, but only briefly to demonstrate to Homer what he would be facing should he not relent. Homer understood, and suggested they solidify their agreement with the adding of chocolate to milk.
 
2012-05-17 10:15:45 AM  
Ritholtz's "Big Picture" blog is one of the absolute best sources for info around.
 
2012-05-17 10:19:09 AM  
The only way to lose at politics is to stop trying. They're a lot like stalkers that way.
 
2012-05-17 10:19:55 AM  
It's worth noting that a congressional panel in the 80s found Glass-Steagall too important to repeal.
 
2012-05-17 10:20:07 AM  
farm7.static.flickr.com

RIP
 
2012-05-17 10:20:58 AM  
I followed most of it, up until the end. Here's what I read:

"By 1974, following the passage of ERISA laws and the introduction of the 401(k), bank regulator OCC authorized national banks to provide "automatic investment services."

"The next seed was planted in 1977: The Federal Reserve Board staff argued bank holding companies should be able to establish securities affiliates that underwrote and dealt in government securities and other bank-eligible securities beyond mere commercial paper."

"But a huge shift intellectually occurred in 1982: FDIC chairm William Isaac issued a "policy statement" suggesting state chartered (non-Federal Reserve member) banks could establish "subsidiaries."

"In 1987, newly appointed Federal Reserve chair pressed the FOMC Board for formal approval of "Section 20 affiliate exemptions." Fed Chair Paul Volcker had not supported these exemptions to allow bank holding companies to establish subsidiaries. Also in 1987: Competitive Equality Banking Act (CEBA). In theory, this was a response to the Savings & Loan crisis, but it too carved out even more exemptions to Glass Steagall."

"In 1988, Greenspan recommended that the FRB expand underwriting powers of Section 20 affiliates. He discussed eliminating the key that component separated commercial deposit banking and iBanking."

"The next major milestone: 1995. That was when Representative James A. Leach (R-IA) became chair of the House Banking Committee. One of his first acts was to introduce a Greenspan supported bill to repeal key provisions of Glass-Steagall (notably, Sections 20 and 32)."

"The final straw for Glass Steagall came on April 6, 1998: That was when Travelers and Citicorp announced their merger. The then existing rules allowed Citigroup to own the Travelers insurance underwriting business for two years before either divestment or FRB approval. Alternatively, the Bank Holding Company Act could be amended or overturned to "permit affiliations between banks and underwriters of property, casualty, and life insurance.And that is exactly what happened. The Gramm-Leach-Bliley Financial Modernization Act of 1999 was signed into law on November 12, 1999."


All that made sense. Where he lost me was with his conclusion:

"Greenspan, Ruben, Reagan and Clinton all contributed to its demise. But the missed opportunity here was President Obama's--it may be his greatest failure. It may come to eventually define his presidency and could be the reason it may be a single term."

Sorry, I don't follow how multiple decades of chipping away at financial regulations that was essentially ended in 1999 is Obama's fault. Obama may not be perfect, but dude--you're gonna pull a muscle reaching like that. If you're gonna lay a corpse at his feet, try and pick something that hasn't been dead for a decade.
 
2012-05-17 10:24:45 AM  

Marcus Aurelius: The only way to lose at politics is to stop trying.


GOP: "Can we privatize Social Security"
US Electorate: "No"
GOP: "Can we privatize Social Security"
US Electorate: "No"
GOP: "Can we privatize Social Security"
US Electorate: "No"
GOP: "Can we privatize Social Security"
US Electorate: "No"
GOP: "Can we privatize Social Security"
US Electorate: "No"
GOP: "Can we privatize Social Security"
US Electorate: "No"
GOP: "Can we privatize Social Security"
US Electorate: "No"
GOP: "Can we privatize Social Security"
US Electorate: "No"
GOP: "Can we privatize Social Security"
US Electorate: "No"
GOP: "Can we privatize Social Security"
US Electorate: "No"
GOP: "Can we privatize Social Security"
US Electorate: "No"
GOP: "Can we privatize Social Security"
US Electorate: "No"
GOP: "Can we privatize Social Security"
US Electorate: "If you do will you stop bothering us?"
GOP: "Yes"
US Electorate: "OK then. Just don't screw it up"
 
2012-05-17 10:26:34 AM  

SmackLT: All that made sense. Where he lost me was with his conclusion:

"Greenspan, Ruben, Reagan and Clinton all contributed to its demise. But the missed opportunity here was President Obama's--it may be his greatest failure. It may come to eventually define his presidency and could be the reason it may be a single term."

Sorry, I don't follow how multiple decades of chipping away at financial regulations that was essentially ended in 1999 is Obama's fault. Obama may not be perfect, but dude--you're gonna pull a muscle reaching like that. If you're gonna lay a corpse at his feet, try and pick something that hasn't been dead for a decade.


You didn't expect History's Greatest Time-Traveling Monster to miss an opportunity like this, did you?

But seriously, it's hilarious that the author thinks Obama can reinstate Glass-Steagall by executive fiat.
 
2012-05-17 10:27:29 AM  

SmackLT: I followed most of it, up until the end. Here's what I read:

"By 1974, following the passage of ERISA laws and the introduction of the 401(k), bank regulator OCC authorized national banks to provide "automatic investment services."

"The next seed was planted in 1977: The Federal Reserve Board staff argued bank holding companies should be able to establish securities affiliates that underwrote and dealt in government securities and other bank-eligible securities beyond mere commercial paper."

"But a huge shift intellectually occurred in 1982: FDIC chairm William Isaac issued a "policy statement" suggesting state chartered (non-Federal Reserve member) banks could establish "subsidiaries."

"In 1987, newly appointed Federal Reserve chair pressed the FOMC Board for formal approval of "Section 20 affiliate exemptions." Fed Chair Paul Volcker had not supported these exemptions to allow bank holding companies to establish subsidiaries. Also in 1987: Competitive Equality Banking Act (CEBA). In theory, this was a response to the Savings & Loan crisis, but it too carved out even more exemptions to Glass Steagall."

"In 1988, Greenspan recommended that the FRB expand underwriting powers of Section 20 affiliates. He discussed eliminating the key that component separated commercial deposit banking and iBanking."

"The next major milestone: 1995. That was when Representative James A. Leach (R-IA) became chair of the House Banking Committee. One of his first acts was to introduce a Greenspan supported bill to repeal key provisions of Glass-Steagall (notably, Sections 20 and 32)."

"The final straw for Glass Steagall came on April 6, 1998: That was when Travelers and Citicorp announced their merger. The then existing rules allowed Citigroup to own the Travelers insurance underwriting business for two years before either divestment or FRB approval. Alternatively, the Bank Holding Company Act could be amended or overturned to "permit affiliations between banks and underwriters of ...


Obama missed an opportunity in 2009 to push for reregulation. But, if you notice, all his financial advisers are the same people who caused the problems, so that's no surprise.
 
2012-05-17 10:29:18 AM  

qorkfiend: y exec


Obama never even made an attempt. Again - go look at his advisers. They're all straight from Goldman Sachs. Do you really think they're going to suggest re-regulation?
 
2012-05-17 10:29:22 AM  

AiryAnne: Don't remember a pool, but I do remember Mt Splashmore.


Came here to say this ^^^
 
2012-05-17 10:29:43 AM  

qorkfiend: But seriously, it's hilarious that the author thinks Obama can reinstate Glass-Steagall by executive fiat.


Well, he could do better than Clinton and at least vocalize his desire for it. He didn't get everything he wanted out of Obamacare, but he did make waves with it.

For the record, I disagree with the guy's conclusion(it was Clinton's greatest failure not to veto it, congressional override possibility or not)
 
2012-05-17 10:30:08 AM  
I liked Matt Taibbi's description of the merger between Travelers and Citigroup, something about holding a gun to the company's head and shouting "Do what I say or the ni-BONG gets it!"
 
2012-05-17 10:30:56 AM  
Lisa: As you know, we've been swimming. And we've developed a taste for it. We both agree that getting our own pool is the way to go. Now before you respond, you must understand that your refusal would result in months and months of...

Lisa, Bart: CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad?

Homer: I understand. Let us celebrate our agreement with the adding of chocolate to milk.

Also, this episode aired 18 years ago.
 
2012-05-17 10:32:09 AM  
Well, at least I got here before the trolls arrived to claim the repeal of Glass-Steagall had nothing to do with our financial crisis.

My faith in Fark has been restored for a day.
 
2012-05-17 10:35:55 AM  

CPT Ethanolic: qorkfiend: y exec

Obama never even made an attempt. Again - go look at his advisers. They're all straight from Goldman Sachs. Do you really think they're going to suggest re-regulation?


Adding regulations to the banking industry isnt easy when you have a bankers cock in your ass, mouth and both hands.
 
2012-05-17 10:35:55 AM  

SmackLT: Sorry, I don't follow how multiple decades of chipping away at financial regulations that was essentially ended in 1999 is Obama's fault.


Clearly, you've forgotten about his time machine.
 
2012-05-17 10:36:34 AM  
Nice article detailing Glass Steagall's "death of a thousand cuts".

Kinda blows it at the end but the rest is pretty accurate.
 
2012-05-17 10:38:30 AM  
All these efforts are futile. The system is broken.

The fundamental problem is that nearly nothing backs the fiat paper we call money. Its not about gold, its about tangible value. If everyone tried to turn their cash into anything tangible (gold, food, oil, strippers, beer, etc.) there is nowhere near enough actual stuff to cover the paper. You literally would run out of stuff to buy before you ran out of dollars. The only thing that keep the system afloat is people's faith in banks. Once that faith erodes and their seek to withdraw their assets and are told they cannot then bad things start happening.

Greeks have withdrawn over a billion Euros from their banks over the last few days.

/Canned food and shotguns
 
2012-05-17 10:40:12 AM  

soup: Lisa: As you know, we've been swimming. And we've developed a taste for it. We both agree that getting our own pool is the way to go. Now before you respond, you must understand that your refusal would result in months and months of...

Lisa, Bart: CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad?

Homer: I understand. Let us celebrate our agreement with the adding of chocolate to milk.

Also, this episode aired 18 years ago.


1.bp.blogspot.com
 
2012-05-17 10:43:22 AM  
The summer wind came blowin' in from across the sea...
 
2012-05-17 10:43:36 AM  

DarwiOdrade: SmackLT: Sorry, I don't follow how multiple decades of chipping away at financial regulations that was essentially ended in 1999 is Obama's fault.

Clearly, you've forgotten about his time machine.


This is why I'm leaning towards voting for Obama. If I vote against him, I would be afraid that he'd send an Obaminator from the future to kill my mother before I'm born.
 
2012-05-17 10:48:27 AM  

Marcus Aurelius: The only way to lose at politics is to stop trying. They're a lot like stalkers that way.


Sociopaths. Sociopaths is the word you're looking for.
 
2012-05-17 10:49:12 AM  

lewismarktwo: soup: Lisa: As you know, we've been swimming. And we've developed a taste for it. We both agree that getting our own pool is the way to go. Now before you respond, you must understand that your refusal would result in months and months of...

Lisa, Bart: CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad?

Homer: I understand. Let us celebrate our agreement with the adding of chocolate to milk.

Also, this episode aired 18 years ago.

[1.bp.blogspot.com image 504x535]


Looks like someone needs to L2Maths
 
2012-05-17 10:51:01 AM  

CPT Ethanolic: qorkfiend: y exec

Obama never even made an attempt. Again - go look at his advisers. They're all straight from Goldman Sachs. Do you really think they're going to suggest re-regulation?


Must be nice to always blame a democrat and never look at any of the republicans in office that GS advisors. Republicans pushed for the deregulation and have no desire to see the banks shortsighted stupidity reined in. After all missing out on all thos campaign donations and after congress jibs are to important to worry about the US.
 
2012-05-17 10:51:38 AM  

That Motherfarking Gingerbear: lewismarktwo: soup: Lisa: As you know, we've been swimming. And we've developed a taste for it. We both agree that getting our own pool is the way to go. Now before you respond, you must understand that your refusal would result in months and months of...

Lisa, Bart: CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad?

Homer: I understand. Let us celebrate our agreement with the adding of chocolate to milk.

Also, this episode aired 18 years ago.

[1.bp.blogspot.com image 504x535]

Looks like someone needs to L2Maths


thatsthejoke.jpg
 
2012-05-17 10:53:04 AM  

jayhawk88: Bart of Darkness


Now I remember. Been a while since I religiously watched the show, and that slipped my mind.
 
2012-05-17 10:54:48 AM  

soup: Also, this episode aired 18 years ago.


t.qkme.me

Feels old, man.
 
2012-05-17 10:54:50 AM  

soup: Lisa: As you know, we've been swimming. And we've developed a taste for it. We both agree that getting our own pool is the way to go. Now before you respond, you must understand that your refusal would result in months and months of...

Lisa, Bart: CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad? CanwehaveapoolDad?

Homer: I understand. Let us celebrate our agreement with the adding of chocolate to milk.

Also, this episode aired 18 years ago.


All Simpsons references made that anyone appreciates come from episodes made before 1999. Fact.
 
2012-05-17 10:55:42 AM  
Obviously, if we eliminate all socialist regulations, the Banking, Energy and Housing inudstries will play nice out of the goodness of their hearts and the Free Market. This is common sense, people. History is on our side.
 
2012-05-17 10:55:50 AM  
Banks work slowly, over decades and centuries. FFS, they put Andrew Jackson on the $20 bill just to spite him.

Big banks are evil, corrupt institutions, and they've been working diligently to undermine democracy for their own profit since the founding of the Republic.
 
GOB
2012-05-17 10:57:40 AM  

Corporate Self: All these efforts are futile. The system is broken.

The fundamental problem is that nearly nothing backs the fiat paper we call money. Its not about gold, its about tangible value. If everyone tried to turn their cash into anything tangible (gold, food, oil, strippers, beer, etc.) there is nowhere near enough actual stuff to cover the paper. You literally would run out of stuff to buy before you ran out of dollars. The only thing that keep the system afloat is people's faith in banks. Once that faith erodes and their seek to withdraw their assets and are told they cannot then bad things start happening.

Greeks have withdrawn over a billion Euros from their banks over the last few days.

/Canned food and shotguns


What's the alternative then? Greece is stuck with austerity measures because they have no control over their own currency, much the same as pegging your currency to a metal (or whatever). I refuse to accept "canned food and shotguns" as a viable alternative to our current monetary system.
 
2012-05-17 11:00:33 AM  
FTA:

Comments
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.


Fark should add that disclosure.
 
2012-05-17 11:06:13 AM  
I think laying that heavy of a blame on Obama is a little stretchy, but it does ring true to the extent that the motherfarkers he's got on his financial team are pretty much the same mix of motherfarkers that farked this economy up. One of those ways is not pushing real farking hard for the reinstatement of the GSA.

But, then again, i'm just a dirty lib.
 
2012-05-17 11:07:50 AM  
For the millionth time, Glass-Steagall had nothing to do with the 2008 crash. If anything, it helped prevent the crisis from getting worse. Seethe left-wing economist Brad DeLong and the right-wing economist Tyler Cowen agrees, and so does Megan McArdle of The Atlantic.

Glass-Steagall had nothing to do with the unregulated trade in credit default swaps. Glass-Steagall had nothing to do with mortgage-backed securities. Glass-Steagall had nothing to do with inflating the housing bubble.

It wasn't the big hybrid banks that failed, it was the large independent investment banks that failed that took some of the smaller commercial banks with them. If Glass-Steagall were the problem, you'd see the exact opposite happening.

All GLB repealed in Glass-Steagall was the rule that prevented commercial and investment banks from affiliating with each other - which had nothing to do with the root causes of the crash.

The "repeal" of Glass-Steagall (which was actually only a repeal of two sections of the second Glass-Steagall Act) is a convenient scapegoat for some to blame the whole crash on - nothing more.
 
2012-05-17 11:11:29 AM  

GOB: Corporate Self: All these efforts are futile. The system is broken.

The fundamental problem is that nearly nothing backs the fiat paper we call money. Its not about gold, its about tangible value. If everyone tried to turn their cash into anything tangible (gold, food, oil, strippers, beer, etc.) there is nowhere near enough actual stuff to cover the paper. You literally would run out of stuff to buy before you ran out of dollars. The only thing that keep the system afloat is people's faith in banks. Once that faith erodes and their seek to withdraw their assets and are told they cannot then bad things start happening.

Greeks have withdrawn over a billion Euros from their banks over the last few days.

/Canned food and shotguns

What's the alternative then? Greece is stuck with austerity measures because they have no control over their own currency, much the same as pegging your currency to a metal (or whatever). I refuse to accept "canned food and shotguns" as a viable alternative to our current monetary system.


What can we do? The politicians are beholden to the banks and the banks don't want to admit the party is over.

Until rational people take control, nothing can be done. Sadly, we may need to burn it all down in order to start over.
 
2012-05-17 11:14:34 AM  

GOB: Corporate Self: All these efforts are futile. The system is broken.

The fundamental problem is that nearly nothing backs the fiat paper we call money. Its not about gold, its about tangible value. If everyone tried to turn their cash into anything tangible (gold, food, oil, strippers, beer, etc.) there is nowhere near enough actual stuff to cover the paper. You literally would run out of stuff to buy before you ran out of dollars. The only thing that keep the system afloat is people's faith in banks. Once that faith erodes and their seek to withdraw their assets and are told they cannot then bad things start happening.

Greeks have withdrawn over a billion Euros from their banks over the last few days.

/Canned food and shotguns

What's the alternative then? Greece is stuck with austerity measures because they have no control over their own currency, much the same as pegging your currency to a metal (or whatever). I refuse to accept "canned food and shotguns" as a viable alternative to our current monetary system.


He's ignoring the fungible value of ANY currency, gold or paper. (good isn't magic - its value is in what it can buy)

If everyone withdrew their money and tried to spend it all at once you'd have massive inflation. Each individual dollar would be worth less as people can throw more around. As the buy out continued, it'd reduce in quantity and prices would rise.

And get this - eventually prices would stabilize because all that money being used to buy things IS GOING TO PEOPLE. Who then use it to buy things. Or save. Or invest. Or just get tired of spending it.

So you'd have a giant redistribution and then... Money working as money. So long as SOMETHING is considered a liquid asset it'll flow. Whether its gold or paper. Gold's value is JUST as arbitrary as anything else. You just have less options to deal with inflation and deflation with it than paper.
 
2012-05-17 11:15:47 AM  

Lt. Col. Angus: FTA:

Comments
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

Fark should add that disclosure.


That's awesome. I'm stealing that one.
 
2012-05-17 11:18:01 AM  

DirkValentine: I think laying that heavy of a blame on Obama is a little stretchy, but it does ring true to the extent that the motherfarkers he's got on his financial team are pretty much the same mix of motherfarkers that farked this economy up. One of those ways is not pushing real farking hard for the reinstatement of the GSA.

But, then again, i'm just a dirty lib.


Obama could fix a lot of the problems with just 4 words: Treasury Secretary Elizabeth Warren

Make that 7: recess appointment of...
 
2012-05-17 11:19:49 AM  
It'$ $trange that our politician$ would pa$$ legi$lation that i$ clearly contradictory to the health of the nation$ financial in$titution$ and that put$ the intere$t$ of a few large bank$ above tho$e of the general public. I wonder what could po$$ibly motivate them to do $uch a thing?

Oh, and trying to pin this mess entirely on one party or the other is just asinine. They're both elbow-deep in the Wall Street cookie jar, and both are completely culpable in creating this mess. You can't get those farkers to agree that water is wet or the sky is blue, but introduce a bill to felate the banks while farking the populace, and suddenly it's all bipartisanship and happy rainbows.
 
2012-05-17 11:21:21 AM  

Deneb81: GOB: Corporate Self: All these efforts are futile. The system is broken.

The fundamental problem is that nearly nothing backs the fiat paper we call money. Its not about gold, its about tangible value. If everyone tried to turn their cash into anything tangible (gold, food, oil, strippers, beer, etc.) there is nowhere near enough actual stuff to cover the paper. You literally would run out of stuff to buy before you ran out of dollars. The only thing that keep the system afloat is people's faith in banks. Once that faith erodes and their seek to withdraw their assets and are told they cannot then bad things start happening.

Greeks have withdrawn over a billion Euros from their banks over the last few days.

/Canned food and shotguns

What's the alternative then? Greece is stuck with austerity measures because they have no control over their own currency, much the same as pegging your currency to a metal (or whatever). I refuse to accept "canned food and shotguns" as a viable alternative to our current monetary system.

He's ignoring the fungible value of ANY currency, gold or paper. (good isn't magic - its value is in what it can buy)

If everyone withdrew their money and tried to spend it all at once you'd have massive inflation. Each individual dollar would be worth less as people can throw more around. As the buy out continued, it'd reduce in quantity and prices would rise.

And get this - eventually prices would stabilize because all that money being used to buy things IS GOING TO PEOPLE. Who then use it to buy things. Or save. Or invest. Or just get tired of spending it.

So you'd have a giant redistribution and then... Money working as money. So long as SOMETHING is considered a liquid asset it'll flow. Whether its gold or paper. Gold's value is JUST as arbitrary as anything else. You just have less options to deal with inflation and deflation with it than paper.


The inflation you speak of would drive 99% of the population into abject poverty. Savings and investments would be wiped out.

How do you define "collapse of society"?
 
2012-05-17 11:30:05 AM  

imontheinternet: DirkValentine: I think laying that heavy of a blame on Obama is a little stretchy, but it does ring true to the extent that the motherfarkers he's got on his financial team are pretty much the same mix of motherfarkers that farked this economy up. One of those ways is not pushing real farking hard for the reinstatement of the GSA.

But, then again, i'm just a dirty lib.

Obama could fix a lot of the problems with just 4 words: Treasury Secretary Elizabeth Warren

Make that 7: recess appointment of...


That's a much more succinct way of putting it.
 
2012-05-17 11:33:33 AM  

Corporate Self: Deneb81: GOB: Corporate Self: All these efforts are futile. The system is broken.

The fundamental problem is that nearly nothing backs the fiat paper we call money. Its not about gold, its about tangible value. If everyone tried to turn their cash into anything tangible (gold, food, oil, strippers, beer, etc.) there is nowhere near enough actual stuff to cover the paper. You literally would run out of stuff to buy before you ran out of dollars. The only thing that keep the system afloat is people's faith in banks. Once that faith erodes and their seek to withdraw their assets and are told they cannot then bad things start happening.

Greeks have withdrawn over a billion Euros from their banks over the last few days.

/Canned food and shotguns

What's the alternative then? Greece is stuck with austerity measures because they have no control over their own currency, much the same as pegging your currency to a metal (or whatever). I refuse to accept "canned food and shotguns" as a viable alternative to our current monetary system.

He's ignoring the fungible value of ANY currency, gold or paper. (good isn't magic - its value is in what it can buy)

If everyone withdrew their money and tried to spend it all at once you'd have massive inflation. Each individual dollar would be worth less as people can throw more around. As the buy out continued, it'd reduce in quantity and prices would rise.

And get this - eventually prices would stabilize because all that money being used to buy things IS GOING TO PEOPLE. Who then use it to buy things. Or save. Or invest. Or just get tired of spending it.

So you'd have a giant redistribution and then... Money working as money. So long as SOMETHING is considered a liquid asset it'll flow. Whether its gold or paper. Gold's value is JUST as arbitrary as anything else. You just have less options to deal with inflation and deflation with it than paper.

The inflation you speak of would drive 99% of the population into abject poverty. Savings and investments would be wiped out.

How do you define "collapse of society"?


1) it's an arbitrary thought experiment - what would happen if??? I was oppersting under your statement of "if everyone tried to turn their money into tangible goods".
You're assuming that it will happen I your world view with no real explanation as to how we get there. Unless you're 'how we get there" is the collapse itself - but then you have the collapse CAUSING the collapse...

2) You provided no explanation as to why gold wouldn't ALSO meet that same rapid spike in inflation of everyone tried to spend all their good backed currency at once. Putting all the world's gold supply on the market as a liquid asset and having everyone spend at once would work the exact same way. The value goes down as more is in the marketplace.
 
2012-05-17 11:34:25 AM  
Random "good"s = "gold". Damn autocorrect.
 
2012-05-17 11:43:53 AM  

SmackLT: "Greenspan, Ruben, Reagan and Clinton all contributed to its demise. But the missed opportunity here was President Obama's--it may be his greatest failure. It may come to eventually define his presidency and could be the reason it may be a single term."

Sorry, I don't follow how multiple decades of chipping away at financial regulations that was essentially ended in 1999 is Obama's fault. Obama may not be perfect, but dude--you're gonna pull a muscle reaching like that. If you're gonna lay a corpse at his feet, try and pick something that hasn't been dead for a decade.



I"m guessing (becuase it takes a little leap in logic)...that the author is saying that in the wake of the economic collapse he could have easily pushed through sweeping regulations to counter all the erosion.

Sort of like how people jumped at the opportunity to join tarp and the patriot act..simply becuase any action is always better than no action.
 
2012-05-17 11:55:57 AM  

Shamwow: CPT Ethanolic: qorkfiend: y exec

Obama never even made an attempt. Again - go look at his advisers. They're all straight from Goldman Sachs. Do you really think they're going to suggest re-regulation?

Must be nice to always blame a democrat and never look at any of the republicans in office that GS advisors. Republicans pushed for the deregulation and have no desire to see the banks shortsighted stupidity reined in. After all missing out on all thos campaign donations and after congress jibs are to important to worry about the US.


Can't speak for anyone else, but I think it's perfectly valid to look at the guy that was elected specifically to change things and ask why his advisers are the same guys that caused the problems he was elected to fix.

Being critical of one party is not automatically support of another.
 
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