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Home Publications Blogs Beat the Press For the 645,546th Time, We Can Put Conditions on Bank Bailouts

For the 645,546th Time, We Can Put Conditions on Bank Bailouts

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Saturday, 23 October 2010 08:14

Joe Nocera has a nice discussion of the foreclosure scandal in the NYT. However at the end he decries the fact that if we require Bank of America and other big banks to adhere to the law, then the losses could be so large that we would need to bail them out again.

The part missing from this story is that we could have bailed the banks out with conditions that were so onerous the banks would not be happy about the bailouts. We could have wiped out the shareholders, forced the creditors to take large haircuts and also put real caps (instead of the idiot versions intended to fool gullible reporters) on executive compensation.

The reason that these conditions were not imposed in 2008 is because the of the power of Wall Street, not the underlying dynamics of the situation. Nocera should have figured this one out by now.

Comments (5)Add Comment
Your Fired!
written by JayR, October 23, 2010 10:14
"...also put real caps...on executive compensation..." What about firing the top executives?!?!?! This seems like a much _simpler_ and less government intrusive idea then "pay cap". If the free market really thinks those executives are great then the will find new jobs.
...
written by izzatzo, October 23, 2010 10:21
... if we require Bank of America and other big banks to adhere to the law, then the losses could be so large that we would need to bail them out again.


Nocera is correct. When are stupid liberals going to understand that regulation is futile and just begets more failure of exactly what it's trying to regulate in the first place.

As proof, look what happens when banks try to pay back the public for the bailouts, the same way a burglar tries to pay back his victims for a robbery. They get blasted by Baker as crooks.

The act of paying back is effectively an admission that a crime was committed which can result in a jail term.

Regulations which attempt to prevent theft, like all regulations, actually cause more thefts rather than prevent them, because thieves like banks, know they cannot return the stolen goods without getting caught, so they just steal even more.
Free Market?
written by andrews, October 23, 2010 11:55
When executive compensation actually becomes subject to the market that might make sense. Until then we will have it set by incestuous compensation committees selected by the executive being paid, who sets their compensation in return.

You recently saw a "say-on-pay" proposal shot down which would legally allow the owners of a company at least be involved in a minor approval role in the compensation decision. Currently the law doesn't allow owners to decide how much their employees are paid in a public corporation. Now that's the kind of free market rule Republicans love.
...
written by Queen of Sheba, October 23, 2010 5:49
If we had a truly progressive tax system and rules classifying all that exorbitant executive compensation as earned income, it wouldn't make any difference how much the crooks got paid - a very large chunk of it would be paid to the treasury via the IRS.
The sniveling douchebag banker lapdog Bernanke is engineering the transfer of even more power to the couldn't-care-less-about-America financial sector
written by Paul Yarbles, October 23, 2010 11:53
The Fed bakes a bigger pie but hands out a much bigger portion to the bankster cunts.
So we can all become little runts.
Even more dependent on the bankster cunts
for all of our needs and wants.







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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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