A government bank

By law the feds must seize and operate a company which is sought and convicted for tax evasion prior to auction. The government ran it for a few months before getting rid of it and in that time the whorehouse revenues plummeted. I mean....how in the hell does that happen? :lol:

~Chris

Would you really want to go to a government-run whorehouse? :p
 
FYI the Federal Reserve is a conglomerate of private concerns who have assumed the mantle of government agency - they call themselves the federal reserve, but are not the Federal Reserve :p

I came across an interesting article (hugely helpful if I could post a link) which charted the rise and fall of American banking from the Great Depression, through speedbumps along the way, until now.

It was a story much along the lines of, "devious shark cuts swimmer then backs off - allowing other sharks to gather and eat and fight, and only then does it come back in, to eat them all - weakened as they are".

Perhaps it's a less important question 'what should we do' than is 'who is to blame' - as there seems to be a long term pattern.
 
Sonora, I think a government-run entity can fairly compete with private banks. It is a great idea to inject competition into the market by encouraging both private and public for-profit entities.
 
Sonora, I think a government-run entity can fairly compete with private banks. It is a great idea to inject competition into the market by encouraging both private and public for-profit entities.

At this point, how hard is it to "compete" with private banks? "Hasn't yet destroyed itself" is a win.

Cleo
 
Sonora, I think a government-run entity can fairly compete with private banks. It is a great idea to inject competition into the market by encouraging both private and public for-profit entities.

Well, to the consumer, I definitely agree that a government run bank can be just as friendly--and perhaps friendlier than a private bank. In most cases however, a government run anything tends to lose money, which of course ends up being bad for the taxpayer.

Hey, it might work fine. My preconceptions might be wrong. But just looking at the track record, I would feel more comfortable knowing the market forces are driving private entities to compete, all under the watch of the Feds.

~Chris
 
By law the feds must seize and operate a company which is sought and convicted for tax evasion prior to auction. The government ran it for a few months before getting rid of it and in that time the whorehouse revenues plummeted. I mean....how in the hell does that happen?

Maybe you just answered it. If a company charged with crimes, it's reputation lost, it probably doesn't attract many customers (especially when there's a lot of competition as there probably is in the whore business). I don't see why companies in the adult industry should be an exception.
 
The free market works fine with limited government intervention. It is why we don't have to muddle through horse feces in our streets and it is how we can communicate this way today.

You are just factually wrong on so many levels about what government has/can do but let;s just take the one example you give since I donlt know what the horse feces refers to. We are communicating via the internet,

The USSR's launch of Sputnik spurred the United States to create the Advanced Research Projects Agency, known as ARPA, in February 1958 to regain a technological lead.[2][3] ARPA created the Information Processing Technology Office (IPTO) to further the research of the Semi Automatic Ground Environment (SAGE) program, which had networked country-wide radar systems together for the first time. J. C. R. Licklider was selected to head the IPTO, and saw universal networking as a potential unifying human revolution.

Licklider moved from the Psycho-Acoustic Laboratory at Harvard University to MIT in 1950, after becoming interested in information technology. At MIT, he served on a committee that established Lincoln Laboratory and worked on the SAGE project. In 1957 he became a Vice President at BBN, where he bought the first production PDP-1 computer and conducted the first public demonstration of time-sharing.

At the IPTO, Licklider got Lawrence Roberts to start a project to make a network, and Roberts based the technology on the work of Paul Baran,[4] who had written an exhaustive study for the U.S. Air Force that recommended packet switching (as opposed to circuit switching) to make a network highly robust and survivable. After much work, the first two nodes of what would become the ARPANET were interconnected between UCLA and SRI (later SRI International) in Menlo Park, California, on October 29, 1969. The ARPANET was one of the "eve" networks of today's Internet.

Following on from the demonstration that packet switching worked on the ARPANET, the British Post Office, Telenet, DATAPAC and TRANSPAC collaborated to create the first international packet-switched network service. In the UK, this was referred to as the International Packet Switched Service (IPSS), in 1978. The collection of X.25-based networks grew from Europe and the US to cover Canada, Hong Kong and Australia by 1981. The X.25 packet switching standard was developed in the CCITT (now called ITU-T) around 1976.

X.25 was independent of the TCP/IP protocols that arose from the experimental work of DARPA on the ARPANET, Packet Radio Net and Packet Satellite Net during the same time period. Vinton Cerf and Robert Kahn developed the first description of the TCP protocols during 1973 and published a paper on the subject in May 1974. Use of the term "Internet" to describe a single global TCP/IP network originated in December 1974 with the publication of RFC 675, the first full specification of TCP that was written by Vinton Cerf, Yogen Dalal and Carl Sunshine, then at Stanford University. During the next nine years, work proceeded to refine the protocols and to implement them on a wide range of operating systems.

The first TCP/IP-based wide-area network was operational by January 1, 1983 when all hosts on the ARPANET were switched over from the older NCP protocols. In 1985, the United States' National Science Foundation (NSF) commissioned the construction of the NSFNET, a university 56 kilobit/second network backbone using computers called "fuzzballs" by their inventor, David L. Mills. The following year, NSF sponsored the conversion to a higher-speed 1.5 megabit/second network. A key decision to use the DARPA TCP/IP protocols was made by Dennis Jennings, then in charge of the Supercomputer program at NSF.

The opening of the network to commercial interests began in 1988. The US Federal Networking Council approved the interconnection of the NSFNET to the commercial MCI Mail system in that year and the link was made in the summer of 1989. Other commercial electronic e-mail services were soon connected, including OnTyme, Telemail and Compuserve. In that same year, three commercial Internet service providers (ISP) were created: UUNET, PSINet and CERFNET. Important, separate networks that offered gateways into, then later merged with, the Internet include Usenet and BITNET. Various other commercial and educational networks, such as Telenet, Tymnet, Compuserve and JANET were interconnected with the growing Internet. Telenet (later called Sprintnet) was a large privately funded national computer network with free dial-up access in cities throughout the U.S. that had been in operation since the 1970s. This network was eventually interconnected with the others in the 1980s as the TCP/IP protocol became increasingly popular. The ability of TCP/IP to work over virtually any pre-existing communication networks allowed for a great ease of growth, although the rapid growth of the Internet was due primarily to the availability of commercial routers from companies such as Cisco Systems, Proteon and Juniper, the availability of commercial Ethernet equipment for local-area networking, and the widespread implementation of TCP/IP on the UNIX operating system.

http://en.wikipedia.org/wiki/Internet
 
Screw the government, let Google run your banks.

I laughed at first, then realized that you were probably on to something. You killed me a little bit today, warpus. Killed me. :(
 
Well, to the consumer, I definitely agree that a government run bank can be just as friendly--and perhaps friendlier than a private bank. In most cases however, a government run anything tends to lose money, which of course ends up being bad for the taxpayer.

Hey, it might work fine. My preconceptions might be wrong. But just looking at the track record, I would feel more comfortable knowing the market forces are driving private entities to compete, all under the watch of the Feds.

~Chris

What track record? The S&L bailout, which was "bad for the taxpayer?" The current bailout, which is "bad for the taxpayer?" LTCM? If you care at all about the taxpayer, private banks' track record sucks, at least since free marketeers began to make up "the Feds."

No one wants communism (well, maybe luceafarul does), but serious, responsible, competitive capitalism is the best system, and government helps create that system.

Cleo
 
You are just factually wrong on so many levels about what government has/can do but let;s just take the one example you give since I donlt know what the horse feces refers to. We are communicating via the internet,

Of course the government is great at getting the ball rolling in certain areas because of our diplomatic and militarial pursuits, but consider the modern internet is almost entirely occupied and operated by private entities Mark. Private...

And what happens after these great ideas are spun? They are released into the capitalist system and private hands improve it tremendously. I had the opportunity to fool around with the old packet system and I can safely say we are much better off with this privately operated system.

And my point was actually referring to this forum more specifically. And the feces, if you are aware of our previous mode of transportation before the automobile, is justification enough that free market capitalism works. Certainly you know the story of the automobile? And Mark, I beg of you to please let us all know a bunch of things the government has run efficiently.

Cleo--not sure what you are talking about there. My reference and actually every post in this thread has indicated my problem is regarding government for-profit entities.

Obviously in times when the free market fails to remedy a problem, it is the responsibilty of the taxpayer to fund government operations to save the system which said taxpayer relies on to make money. I don't know many who would argue that. But isn't this thread about a government run bank?

~Chris
 
I think all banks should be forced to pay for their own woes and we should do nothing whatsoever for them, this capitalism not some weird socialist nightmare. I do admit though I am biased when it comes to banks.

As to the OP why have another bank? In England we now have half shares in two banks, I don't personally think it's a good idea to mix business and government that closely, except obviously for the BoE.
 
Sonorakitch,

Well, you brought up the idea that the government can't run things properly in a discussion of whether to make a government bank. You then mentioned taxpayers and the "track record" of private banks. I thought it might be useful actually to examine private banks' "track records," specifically their extensive history of setting fire to trillions of taxpayer dollars.

Cleo
 
This is just another thought but, wouldn't this effectively solve the government's debt over the course of a few years. Nationalize all the banks, fix the interests rates and my guess would be you would have lower interests rates and be able to pay off the debt with a portion of the interest people would be paying. Then in general it would fix the economy because the federal bank would really never collapse, people would still be able to inject money into the economy because they would still be able to get loans.

The one problem I would see is that what about Personal loans, or conslidation loans, and other such things that in general really have no collateral. I mean a car or house loan the bank could take the car or house. The only thing I could see with that is charge defaulting on said types of loans onto taxes so the government doesn't get screwed.
 
I am more concerned about the possibility of discrimination from the government, whether real or perceived, and the lack of redress of a consumer in such cases. In most cases competition provides alternatives so that discrimination is mitigated by loss of profit generating customer. If there is but one bank, where will people go if they are discriminated against, and what will prevent discrimination?

I also dislike the possibility of malfeasance by officials in using the power of the government to ensure dubious activities in the financial sector. TARP was already a clear signal that this is very real.

Finally, what is the path of risk mitigation if the government is the first and last line on risk?
 
Sonorakitch,

Well, you brought up the idea that the government can't run things properly in a discussion of whether to make a government bank. You then mentioned taxpayers and the "track record" of private banks. I thought it might be useful actually to examine private banks' "track records," specifically their extensive history of setting fire to trillions of taxpayer dollars.

Cleo

Private banks certainly have screwed up lately (some of which is directly attributed to the government by the way), but I shudder to think what would happen if our government were to operate a bank. Again, the feds just can't seem to get it right when trying to manage a for-profit entity.

What needs to happen in the future is privately (in the sense of non-governmental) owned banks need greater oversight from the Feds. Of course, I think this crisis will prove valuable to the banking sector in the long run; a lesson so to speak.

~Chris
 
Hahahahaha...a working and viable system for 75+ years and this hiccup and you want to trash the whole idea?
.....
The free market works fine with limited government intervention.
.....

Wow, the world banks just lost more money than they made in the whole of history and this is just a hiccup?

The free market just got unbelievably expensive.

It's obvious some people still believe the PR guff.
 
Wow, the world banks just lost more money than they made in the whole of history and this is just a hiccup?

The free market just got unbelievably expensive.

It's obvious some people still believe the PR guff.

I'd be interested to learn more about your first statement. I have not heard that before in all the news outlets I consume.
 
Private banks certainly have screwed up lately (some of which is directly attributed to the government by the way), but I shudder to think what would happen if our government were to operate a bank. Again, the feds just can't seem to get it right when trying to manage a for-profit entity.

What needs to happen in the future is privately (in the sense of non-governmental) owned banks need greater oversight from the Feds. Of course, I think this crisis will prove valuable to the banking sector in the long run; a lesson so to speak.

~Chris

Our prescriptions are the same -- private banks with effective oversight. I only fear this won't be valuable at all. Between the TARP and the new "bad bank" proposal, it appears that the only lesson our government will teach banks is: get so big you can't be allowed to fail, then do whatever you want because we'll just throw piles and piles of money at you.

Paul Krugman is right: "Under Bush, financial policy consisted of Wall Street types cutting sweet deals, at taxpayer expense, for Wall Street types. Under Obama, it’s precisely the reverse."

Cleo
 
wow I should be a Harvard Economics Professor as this is what I have argued for. I have bolded the red meat anti-commie parts for the conservatives. I agree with this. Just not with the head in the sand let the "free market" solve it stupidity.

The solution to the debt crisis is not more debt but less debt. Two things must happen. First, banks that are de facto insolvent need to be restructured--a word that is preferable to the old-fashioned "nationalization." Existing shareholders will have face that they have lost their money. Too bad; they should have kept a more vigilant eye on the people running their banks. Government will take control in return for a substantial recapitalization after losses have meaningfully been written down. Bondholders may have to accept either a debt-for-equity swap or a 20 per cent "haircut"--a disappointment, no doubt, but nothing compared with the losses suffered when Lehman Brothers went under.

There are precedents for such drastic action, notably the response to the Swedish banking crisis of the early 1990s. The critical point is to avoid the nightmare of a state-dominated financial sector. The last thing America needs is to have all its banks run like Amtrak or, worse, the Internal Revenue Service. State life-support for moribund dinosaur banks is an expedient designed to avert the disaster of a generalized banking extinction, not a belated victory for socialism in North America. It should not and must not impede the formation of new banks by the private sector. Financial history is, after all, an evolutionary process. When old banks die, new banks swiftly take their place. It is therefore vital that state control does not give the old banks an unfair advantage. So recapitalization must be a once-only event, with no enduring government guarantees or subsidies. And there should be a clear timetable for "re-privatization" within, say, ten years.

The second step we need to take is a generalized conversion of American mortgages to lower-interest rates and longer maturities. Currently around 2.3 million U.S. households face foreclosure. That number is certain to rise. For example, $97 billion of $200 billion of option adjustable-rate mortgages will reset in the next two years. The average monthly payment will increase by more than 60 per cent. As a result, up to 8 million households could be driven into foreclosure, driving down home prices even further. Few of those affected have any realistic prospect of refinancing at more affordable rates. So, once again, what is needed is state intervention.

The idea of modifying mortgages appalls legal purists as a violation of the sanctity of contract. But, as with the principle of eminent domain, there are times when the public interest requires us to honor the rule of law in the breach. Repeatedly in the course of the nineteenth century, governments changed the terms of bonds that they issued through a process known as "conversion." A bond with a five per cent coupon would simply be exchanged for one with a three per cent coupon, to take account of falling market rates and prices. Such procedures were seldom stigmatized as default. Today, in the same way, we need an orderly conversion of adjustable rate mortgages to take account of the fundamentally altered financial environment.

Another objection to such a procedure is that it would reward the imprudent. But moral hazard only really matters if bad behaviour is likely to be repeated. I do not foresee anyone asking for or being given an option adjustable-rate mortgage for many, many years. The issue, then, is simply one of fairness. One solution would be for the government-controlled mortgage lenders and guarantors, Fannie Mae and Freddie Mac, to offer all borrowers--including those on fixed rates--the same deal. Permanently lower monthly payments for a majority of U.S. households would almost certainly do more to stimulate consumer confidence than all the provisions of the stimulus package, including the tax cuts.


link
 
wow I should be a Harvard Economics Professor as this is what I have argued for. I have bolded the red meat anti-commie parts for the conservatives. I agree with this. Just not with the head in the sand let the "free market" solve it stupidity.




link

Hows the timetable on Iraq coming? Why do you want to cut and run? etc etc.

Any more obvious responses you can think of?
 
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