• Neuromancer@lemm.ee
    link
    fedilink
    arrow-up
    26
    ·
    1 year ago

    It’s a tough one. Assuming nobody stepped in. Yes there would be devastation but somebody would pick up the assets in a fire sale. So no, there would have been some pain but the system would have been better long term.

    We can’t avoid all pain, otherwise we end up with companies who take stupid risk since they never fail.

    Let them fail and someone else will grow. Otherwise we don’t have a healthy capitalism.

      • Neuromancer@lemm.ee
        link
        fedilink
        arrow-up
        3
        arrow-down
        9
        ·
        1 year ago

        That would have been a horrible idea. For all intents that what they did with the bailouts. We don’t need the government to own banks.

        Let them fail and others will but them up. We don’t need the tax payers assuming trillions in bad loans.

        • ronalicious@lemmy.world
          link
          fedilink
          English
          arrow-up
          4
          ·
          1 year ago

          we don’t have national federally owned banks available to the public, or at least any that I’m aware of.

        • Calavera@lemm.ee
          link
          fedilink
          arrow-up
          2
          ·
          edit-2
          1 year ago

          So your idea is just pray for some rich people to buy the assets and not let the bank’s customers without all their money?

          What if this pray for the rich saviors is not answered? Any plan b? Maybe make this buying a law?

          • Neuromancer@lemm.ee
            link
            fedilink
            arrow-up
            1
            ·
            1 year ago

            Customers wouldn’t be without money. It’s insured.

            Instead we used tax payer money to prop them up and didn’t solve the problem.

            You have to let things fail.

            • Staple_Diet@aussie.zone
              link
              fedilink
              arrow-up
              1
              arrow-down
              2
              ·
              1 year ago

              It’s insured.

              In most western countries the Govt only guarantees up to a certain amount per depositor (in US it is $250k).

              The ballad of Silicon Valley Bank is a good example of why the Govts needed to bail out their banks during GFC. Without the govt backing those banks there would have seen huge runs, and in no time at all the imaginary money banks operate on would have disappeared, meaning companies can’t pay workers, people can’t buy groceries etc.

              Note, I am not defending the heinous behaviour of finance execs leading up to, during and post GFC - for them I’d bring back the guillotine. But rather explaining that bailouts are needed sometimes to ensure the economy keeps ‘flowing’. Post GFC has seen a lot of countries bring in tighter regulations for banks with regards to how much cash on hand they must have, how much in investments/bonds and how much exposure to loans they are allowed. Unfortunately I’m not sure if US took the opportunity to propose and enforce new regulations as many other nations did.

              • Neuromancer@lemm.ee
                link
                fedilink
                arrow-up
                1
                ·
                1 year ago

                We did. We put in many worthless regulations that really didn’t solve the problem.

                I’m a connective republican. Socially more liberal but fiscally conservative.

                The executives of the banks that needed bailouts should have been jailed as they took risk they shouldn’t have taken. All the banks do it because there are no consequences when they fail. Zero.

                They need to punished for mishandling assets so poorly.