@ronv

John Dingle, in a floor speech, was warning the House about the GBLA act would make the banks "too big to fail." You can bet John Dingle, D from Detroit, was right there in support of the GM bailout as it directly affected his constituency.

Oh what strange bedfellows these american politicians are.

The problem is the American Citizens. We love our representatives but hate all others. Wasn't it Tip O'Neil that said "all politics is local."

GM has plants in a lot of representatives districts. I know of MI, TN, and TX right off the top of my head. GM is too big to fail and there are multiple members of congress with GM employed constituents.

 

@ronv

John Dingle, in a floor speech, was warning the House about the GBLA act would make the banks "too big to fail." You can bet John Dingle, D from Detroit, was right there in support of the GM bailout as it directly affected his constituency.

Oh what strange bedfellows these american politicians are.

The problem is the American Citizens. We love our representatives but hate all others. Wasn't it Tip O'Neil that said "all politics is local."

GM has plants in a lot of representatives districts. I know of MI, TN, and TX right off the top of my head. GM is too big to fail and there are multiple members of congress with GM employed constituents.

Okay, One more.
What do you think would have happened if there was not a bail out of the banks.
Then GM.

 

We wouldn't still be in a recession while our "leaders" tell us how great we're doing. We'd actually be deploying resources where they will be productive instead of ... well who knows where the money went.

 

Okay, One more.
What do you think would have happened if there was not a bail out of the banks.
Then GM.

There wouldn't be stupid Cadillac commercials with the slogan, "for all those who dare".
Um, should I dare or should I play it safe and buy a Mercedes or Lexus or a Toyota or a Nissan or a Honda or a ...

 

We wouldn't still be in a recession while our "leaders" tell us how great we're doing. We'd actually be deploying resources where they will be productive instead of ... well who knows where the money went.

How long did the depression last?

 

There wouldn't be stupid Cadillac commercials with the slogan, "for all those who dare".
Um, should I dare or should I play it safe and buy a Mercedes or Lexus or a Toyota or a Nissan or a Honda or a ...

My friend works for GM. He just leased a Caddie. I think he did it on a dare.

 

How long did the depression last?

Longer than it needed to. Huge government spending sucked resources out of the private economy, which is ultimately the only force that can pull us out.

 

Longer than it needed to. Huge government spending sucked resources out of the private economy, which is ultimately the only force that can pull us out.

No, I mean we would have had a depression instead of a recession. That's what happens when all the banks go broke you know.
It was bad enough as it was.

 

There were many other options of where to spend the money other than bailing out campaign donors. And, if you had to choose between, say, two years of serious depression followed by boom years OR a decade of malaise, I'd choose to get it over with.

It makes me very sad when I talk to young people that believe the propaganda that this is the new normal.

 

There were many other options of where to spend the money other than bailing out campaign donors. And, if you had to choose between, say, two years of serious depression followed by boom years OR a decade of malaise, I'd choose to get it over with.

Really, let's hear a few.

 

Longer than it needed to. Huge government spending sucked resources out of the private economy, which is ultimately the only force that can pull us out.

Cool, could you share the "depth of dispair vs time" model with us. Or is it called "dial-a-dispair" model? Anyhow, I'd love to see your calculation. Flash-in-the-pan options are usually so effective, you must be right. It would be like slapping your hand on a shot grill and pulling it off so fast, nothing happens. I'm sure all the overly inflated housing prices and easy money loans would have just continued on - business as usual if a republican would have been at the wheel of this ship. It make so much sense that a little smoke and mirrors from a republican leader and young people would be buying houses left and right.

 

Really, let's hear a few.

If there was no massive bank bailout the government could have just printed money ($1tn instead of borrowing money in the bond market) to make the depositors whole in replacing money that was 'lost'.(the banks effectually just burned all the money, its not in circulation so the new money wouldn't cause inflation) The gambling bankers executives, bondholders and stockholders would eat it but depositors would not.

 

If there was no massive bank bailout the government could have just printed money ($1tn instead of borrowing money in the bond market) to make the depositors whole in replacing money that was 'lost'.(the banks effectually just burned all the money, its not in circulation so the new money wouldn't cause inflation) The gambling bankers executives, bondholders and stockholders would eat it but depositors would not.

You had to make the banks whole or the financial markets would collapse. It came pretty close as it was. No banks, no loans. The loss was a lot more than a trillion. It could not have been made whole by printing money.

 

Here are a couple of references:

http://www.investopedia.com/articles/economics/08/cause-of-great-depression.asp

http://www.investopedia.com/articles/economics/08/fannie-mae-freddie-mac-credit-crisis.asp

https://www.aei.org/publication/hid...-wallison-2008-financial-crisis-might-happen/

If you don't buy into the federal government's involvement through Fannie and Freddie, this might change your thoughts.

 

If you don't buy into the federal government's involvement through Fannie and Freddie, this might change your thoughts.

The collapse was 100% the predictable result of government policy. Does anyone not know that?

 

Here are a couple of references:

http://www.investopedia.com/articles/economics/08/cause-of-great-depression.asp

http://www.investopedia.com/articles/economics/08/fannie-mae-freddie-mac-credit-crisis.asp

https://www.aei.org/publication/hid...-wallison-2008-financial-crisis-might-happen/

If you don't buy into the federal government's involvement through Fannie and Freddie, this might change your thoughts.

I don't think there was ever a question about gov't involvement. The question was what to do to stop the bleeding. The problem was a group effort.

 

The cure for heavy-handed government intervention is not more intervention by the same people that screwed it up.

 

The question was what to do to stop the bleeding. The problem was a group effort.

How did we survive the crash of 1895? Oh yeah, one of those 1 percenters stepped up to the plate. Remember we didn't tax INCOME until 1913 (see attachment). In 1907 there was another crisis, where the government federalized the problem and attempted the solution (Glass Act) see http://www.federalreservehistory.org/Events/DetailView/10 for history. Then 1929 crash.

Then we have Dodd-Frank, 1992, named for Senator Dodd (D-CT) and Representative Frank (D-MA) which encouraged the banks to lend housing money to those with poor credit scores and the government backed the loans through Fannie and Freddie, both are GSE (Government Sponsored Enterprise). You can be sure some had testified before congressional committees about the distribution of the housing loans.

The banks followed the rules of the game as set forth by the government.

Example:

Did you ever wonder how many "took advantage" of that 7500 tax credit (loan paid back at 500 per year); and then the 8000 tax credit (no payback), and those that attempted to trade that 7500 payback for the 8000 no payback? Quite a few. That first one, the government didn't even require a HUD-1 form as prima facia evidence for a period of time when it first came into existence, but did require it once they discovered there could be fraud.

I'm sure everyone is aware they can choose between the standard deduction or the itemized deductions. I'm not sure everyone is aware that some deductions and credits are income limited, meaning if you make more than a few hundered thousand, certain credits and exemptions are reduced. Typically someone chooses which deduction favors their position of paying the minimum federal income tax. They use that "loophole" to "game" the system. If the itemized deductions only had sales tax (actual or government allowance based on income) charity donations, and others, they wouldn't reach the level of the standard deduction ... typically. One can choose the one that benefits the government more ... but their sanity would be in question. There are no loopholes. There is no ambiguity in the law, as the tax laws and other regulations are written exactly as the politicians intended. They become loopholes, when the people discover the ambiguity and disagree with the political class.

Alexis de Tocqueville was correct.

Everyone is guilty of using the tax code to their own advantage. Some use it to commit fraud. The IRS reviews every return (electronically) and some are selected for further review (audits - paper and/or in person).

Imagine if the original 1913 form 1040 were indexed to inflation and used today.

On edit: The tax calculation started at over 20,000. Adjusted for inflation, that figure in 2016 would be : $486,571.72. Damm, I wouldn't have to pay any income tax!!!!

 

How did we survive the crash of 1895? Oh yeah, one of those 1 percenters stepped up to the plate. Remember we didn't tax INCOME until 1913 (see attachment). In 1907 there was another crisis, where the government federalized the problem and attempted the solution (Glass Act) see http://www.federalreservehistory.org/Events/DetailView/10 for history. Then 1929 crash.

Then we have Dodd-Frank, 1992, named for Senator Dodd (D-CT) and Representative Frank (D-MA) which encouraged the banks to lend housing money to those with poor credit scores and the government backed the loans through Fannie and Freddie, both are GSE (Government Sponsored Enterprise). You can be sure some had testified before congressional committees about the distribution of the housing loans.

The banks followed the rules of the game as set forth by the government.

Example:

Did you ever wonder how many "took advantage" of that 7500 tax credit (loan paid back at 500 per year); and then the 8000 tax credit (no payback), and those that attempted to trade that 7500 payback for the 8000 no payback? Quite a few. That first one, the government didn't even require a HUD-1 form as prima facia evidence for a period of time when it first came into existence, but did require it once they discovered there could be fraud.

I'm sure everyone is aware they can choose between the standard deduction or the itemized deductions. I'm not sure everyone is aware that some deductions and credits are income limited, meaning if you make more than a few hundered thousand, certain credits and exemptions are reduced. Typically someone chooses which deduction favors their position of paying the minimum federal income tax. They use that "loophole" to "game" the system. If the itemized deductions only had sales tax (actual or government allowance based on income) charity donations, and others, they wouldn't reach the level of the standard deduction ... typically. One can choose the one that benefits the government more ... but their sanity would be in question. There are no loopholes. There is no ambiguity in the law, as the tax laws and other regulations are written exactly as the politicians intended. They become loopholes, when the people discover the ambiguity and disagree with the political class.

Alexis de Tocqueville was correct.

Everyone is guilty of using the tax code to their own advantage. Some use it to commit fraud. The IRS reviews every return (electronically) and some are selected for further review (audits - paper and/or in person).

Imagine if the original 1913 form 1040 were indexed to inflation and used today.

On edit: The tax calculation started at over 20,000. Adjusted for inflation, that figure in 2016 would be : $486,571.72. Damm, I wouldn't have to pay any income tax!!!!

Did you forget the question?
http://forum.allaboutcircuits.com/t...riminal-enterprise.127865/page-4#post-1046144

 

@ronv

My opine on history is the decision was made, and there is NOTHING one can do about it except punish their elected officials IF they voted against one's opine by not giving them your vote the next time and working to replace them with someone who agrees with your general opinion on how the government should work.

The 1929 crash was assisted by the government by not completely bailing them out. The Federal Reserve was created to minimize the failures of the reserve banks. The Dodd-Frank bill, with the caveat of the law of unintended consequences, created the failure.

Why GM failed was simply they stopped making a profit in 2005, If your business stopped making a profit, it too will fail.

You ask about bailing out GM, GMAC (ALLY), and CHRYSLER ... I can ask why didn't we bail out Ford at the same time? Yes I know Ford got a line of credit from a different government source, but they were not included in the legislation. They did the line of credit so they wouldn't be at a disadvantage to those receiving subsidies.

https://www.thebalance.com/auto-industry-bailout-gm-ford-chrysler-3305670 There is an interesting chart on the link that showed the taxpayers efforts only loss a little over 9 billion. Pocket change for those with DEEP pockets.

UT has s short page about the GM failures ... looks like an start of an incomplete analysis. http://www.laits.utexas.edu/~anorman/long.extra/Projects.F97/GM/Reasons.html There are lessons one can glean from this short read.

The auto industry is 1 percent of the GDP. If GM and Chrysler wasn't bailed out, Toyota and Ford would have gained market share. Toyota has increased it's factories and labor in the U.S. Ford would have grown with an increase in market share.

What's next ... dot.com? Why didn't we bail out the dot.com's? There are thousands of small business' that fail every year. We aren't bailing them out even though the largest job growth is attributed to small businesses creating jobs.

Congress is suppose to "promote the general welfare". Maybe there should be NO business that's classified as "too big to fail".