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The Register has a eminently readable explanation of why big banks are considered too big to fail, and get government bailouts after mismanaging their financial situations.
We seem to rage every time this happens, Let them go Bankrupt! seems the cry from the man in the street.
But that is a juvenile approach which will hurt far more people than those few officers miss-managing the bank or its funds. Banks don't have funds. Its all your funds. And if the bank fails, you mostly get nothing.
The article explains just what banks are (for those of you who slept through Econ 101), and what they are not. Its worth a read! And don't skip the comments section on the article. Many posters had no problem with bailing out the banks, but railed against bank management officers who rarely or never face any serious charges.
When you look at it this way, the federal "Stress Tests", and Forced Closures (over 500 since 1998) imposed on US banks, large and small, was the right course of action when combine with holding our collecting noses and bailing out the big ones.
Its too bad the stress tests, measuring a bank's ability to withstand withdrawals, loan defaults, and deposit slow-downs from unemployed depositors, weren't imposed far earlier. Local and national Banks have learned at least part of the lesson, and are closing money losing branches at a record rate, in favor of ATMs and digital services.
(Score: 0) by Anonymous Coward on Monday May 18 2015, @10:15PM
alan greenspan fixed the price of money at zero and pumped the derivative markets full of printed money (the same tactic used after 2008 was used in 2001 after the dot-com crash)
free-market capitalist alan greenspan aint
you might want to google 'keynesian' (alan greenspan and ben bernanke) and 'austrian' (free market guys like ron paul)
you're right that anyone with half a brain would see what you see. on the other hand, someone with a full brain can understand what really happened
i can understand why you think the way you do. keynesianism has infected a lot of university economics courses. eventually people might wake up when the fiat system collapses
(Score: 2) by wantkitteh on Tuesday May 19 2015, @04:41PM
I'm familiar with Keynesian economics. Why does Alan Greenspan fit in with that in regards to the recession? He was a student of Milton Friedman, neither man had any love for the New Deal, they were the hardest-of-the-hardcore capitalists back in the 60's-70's (before the real wingnuts showed up). Okay, he may be changing his mind now, but it's *way* too late, the damage was done 30 years ago.