The House just passed the biggest bank deregulation bill in a generation

[Timsup2nothin]

So the Republicans in that chamber didn't think it was a good idea? What difference is between these two groups of Republicans that one said "Awesome idea!" and the other one said "This is no good"?

The house has a substantial block of Republicans that call themselves "the Freedom Caucus." This self styled band is made up of absolutely crazy extremists from some of the most backwards parts of the country, where they can get reelected by "taking a stand" against pretty much anything, even if their stand absolutely breaks the country. For example, if they are not given their way on including some insane stipulations in this bill they will tell the Republican leadership that they will, as a block, vote against the next spending bill and force the US into bankruptcy, and the Republican leadership has to take them seriously because "that would actually destroy the country" is not an argument that works on them.

In the senate there is only one Republican who is of similar nature to the Freedom Caucus, because finding an entire state with enough backward thinking dingbats to elect such buffoons is thankfully rare.

 

[Cutlass]

Right now, the economy is being inefficiently buoyed using consumer debt. Businesses getting loans is a great way to stimulate an economy. With the way money-printing works in the States, goals of getting businesses to take on loans is of net benefit.

It's the distributional effect of the profits of those loans that matters, along with the relative risk burden.



Or even, since so many of the owners are actually pension funds, bailing out the employees vs the owners. But that's neither here nor there. Bailing out home owners would have effectively bailed out the banks.

Buying out the bad debt and then (essentially) forgiving it is fine, it will wobble distributional effects, but ehn. But if there's a mound of cash to be hounded out, there's no reason why it had to be handed to the owner of the bad debt instead of the indebted person.

The banks had to, and did, repay all that bailout. If the borrowers had been bailed out, and had to repay it, that would have been the same as not bailing them out at all.

 

[El_Machinae]

You know, I'd always thought that the toxic asset portion of the bailout was much larger than it actually was.