I wonder how much we are going to see in return if the economy is ever fixed.
My guess.. nothing

Susanna: “I really don’t understand why we are not more angry about this. Why are we not protesting in the streets? Why are we not ransacking Wall Street? Where are the indictments?”

That’s the most depressing part of it all, in my opinion. People either don’t understand or (more likely) don’t care that they are being ripped off. Apathy and willful ignorance are the new hallmarks of Western civilization.

I think it’s pretty clear that ‘the government’ doesn’t really give a sh*t about Americans absorbing bank failure and risk. The government, at least the parts that count, has been well and truly bought. Do you think it’s a coincidence that Henry Paulson ‘used to’ work for Goldman Sachs? By the way, Goldman, Citibank, Morgan Stanley, and JP Morgan were all among Obama’s top contributors (source: http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638). I guarantee they weren’t shelling out that cash out of the goodness of their hearts.

You will probably think I am a cynic, or worse, a conspiracy theorist, but recent events have shown that the US is a plutocracy in reality and a democracy in name only. I find it very telling that for decades we were told that universal healthcare was either ‘too expensive’ or would interfere with the free market, but when the banks are in trouble all thoughts of fiscal prudence and the free market are swept aside in an instant.

“Please tell me what that short end of the stick looks like? What are you not getting that you did before?”

I think most people’s answer to this question would be ‘a paycheck’.

It was he massive scale of the greed of the financial industry, fueled by lax regulations on one side and non-enforcement on the other, that enable a utter failure of the financial systems. 40:1 leverage??? Who in their right mind would not only allow but heartily approve??? I read today in the NYT that financial executives have received bonuses at the end of 2008 on par with the bonuses paid out in 2004. How can this happen???

I really don’t understand why we are not more angry about this. Why are we not protesting in the streets? Why are we not ransacking Wall Street? Where are the indictments?

It is very easy to say that we should just allow these failures to happen and suffer the consequences and that government should not get involved, but the victims of such consequences are far ranging and may not have the resources to weather the storms. I also have the distinct impression that the true perpetrators will suffer very little from the debacle they have created.

My husband and I are luckier than most as our sensible living has enabled us to maintain our lifestyle on one income for a good period of time, but I can only hope and pray that my husband finds something before that period is up or before I loose my job.

Whatever happened to personal responsibility and accountability in this country?? You make a stupid decision, you live with the consequences. It’s no one’s job but your own to get you out of whatever mess you get into and the same should go for companies. A little pride in your own accomplishments wouldn’t go amiss around here either.

It may have been American greed that got us into this, but it wasn’t mine. I have the same opinion of the banks that lent these mortgages as I do of the people that got them. For those of us that live within our means, save, plan for retirement, pay off our debts and generally don’t behave like financial morons, we have every right to be upset at footing this bill. It’s like hitting a tree and asking all your neighbors to help you pay for the repairs to your car. Your the one who drove into the tree stupid, you deal with it. If your kid runs up a credit card, do you pay it off for him, or make him pay it so he learns better? What’s good for the goose….

Sure, there would be massive consequences to letting these businesses fail, but the precedents we’re setting now are way more dangerous than any potential cost. As if the federal government hasn’t already acquired more power than it was ever meant to have!

And just for fun, the scariest thing in the world: “Hi, we’re from the government. We’re here to help.”

Risk and failure are two different things. I think you are working off the assumption that 100% of the identified assets are worthless. They are not – the banks know this and so does the government, but they have risk (large risk). The question becomes what is the most appropriate way to distribute the that risk. My point being, I prefer a model where we have two institutions working together to distribute the risk across a broad space. Clearly the government preference as well – they dont want Americans to absorb both bank failure and risk. You have to understand the cross implications of something like Bancorp or Meryl going under?? (Or AIG for that matter.) The hurt to the taxpayer would exponentially grow, destroying more than just the financial industry.

I also get the impression you think this could happen again. I will first say anything is possible…. but its not like anyone is enjoying this. Banks dont take pleasure in losing profits, laying people off, and closing their doors. Beyond their own restructuring and controls, you will see a new set of government standards and measure that place improved controls on banking. This situation isnt profitable – now everyone understands why. I highly doubt you or I will see anything like this again in our lifetimes.

Where are these ‘new efficient’ corps coming from? Our old banks are the new banks. How many banks CEOs and boards have been fired? How many banks have disbanded/sold off complete organizations in favor of a more streamline model? Capitalism is taking place. Please tell me what that short end of the stick looks like? What are you not getting that you did before?

You say ‘It comes down to – do you want the taxpayer to consume all of the risk or a portion of it?’ but I fear you are missing the point. Under the current system, the taxpayer IS consuming all the risk. If Bancorp suddenly goes under, who do you think will be footing the bill?

As for letting an entire industry fold up – could you be any more melodramatic? There will always be a finance industry. New, more efficient corporations would fill the vaccuum left by the old, incompetent, insolvent ones. That’s how capitalism is supposed to work. What we have now is socialism for the rich, while the rest of us get the short end of the stick.