tag:blogger.com,1999:blog-9069955.post6614719068758615709..comments2023-10-26T08:02:44.948-04:00Comments on Connecticut Commentary: Red Notes from a Blue State: Dodd’s Bailout BillDon Pescihttp://www.blogger.com/profile/11167988001948356357noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-9069955.post-65363259330390437562010-05-16T10:46:15.915-04:002010-05-16T10:46:15.915-04:00"...but it cannot possibly make things worse...."...but it cannot possibly make things worse."<br /><br />If it institutionalizes the power of the FDIC to bailout non-banking institutions, things will get much worse, for three reasons: 1) The FDIC does an OK job in bailing out failed banks. If its responsibilities are extended to provide bailouts to non-banks, it will have a deleterious impact everything it does; 2) you can’t secure a loan with fake securities; 3) the bill politicizes lending institutions; try to imagine a politicized judiciary, and you’ll see the problem.<br /><br />Dodd was chiefly responsible for dismantling Glass-Steagall (http://donpesci.blogspot.com/2009/03/dodd-and-appearance-of-corruption.html) which DID bar financial institutions from engaging in banking functions. This is not an answer to that mistake.Don Pescihttps://www.blogger.com/profile/11167988001948356357noreply@blogger.comtag:blogger.com,1999:blog-9069955.post-25077117387420288182010-05-16T10:26:21.157-04:002010-05-16T10:26:21.157-04:00That would be Arizona. Thanks, corrected the goof....That would be Arizona. Thanks, corrected the goof.Don Pescihttps://www.blogger.com/profile/11167988001948356357noreply@blogger.comtag:blogger.com,1999:blog-9069955.post-57430411983651300472010-05-16T10:15:02.559-04:002010-05-16T10:15:02.559-04:00Arkansas?Arkansas?Greghttps://www.blogger.com/profile/00230305109522078434noreply@blogger.comtag:blogger.com,1999:blog-9069955.post-14408368425776804772010-05-16T10:02:44.236-04:002010-05-16T10:02:44.236-04:00Don,
Michael Lewis' "The Big Short"...Don,<br /> Michael Lewis' "The Big Short" is essential reading on the last financial crisis. He doesn't really offer any specific solutions. It's more a chronicle of highminded idiots charading as the smartest group of people in the world. By the end of it you don't know whether to laugh or cry that such a small group of people are capable of blowing it so f*&king badly, dragging the rest of us down with them in the process.<br /><br /> As the book pertains to your post, I really think that the game has become so corrupt and is already so thoroughly rigged that no kind of meaningful reform is possible. Goldman Sachs, for instance, is not by any stretch of the imagination what most people would consider a traditional bank. They add no social value, simply charging the rest of us for, well, nothing, yet as we saw, can put us all in great peril. Worse, they've have become a sort of quasi government entity, a feeder school for the U.S. Treasury Department that is both feared and admired by Republicans and Democrats alike. <br /><br />Like I said, the game is rigged. The only thing that will make things better is a total reset. Goldman and other institutions already have implicit government backing. I doubt very much that Dodd's bill will do any good... but it cannot possibly make things worse.<br /><br />In the meantime, perhaps our greater loss will be in terms of intellectual capital, siphoned away by the finance system. Men of intelligence should aspire to become doctors, lawyers (not the kind that works on Wall Street mind you) or CEOs of traditional companies.... but not bankers. Wall Street is simply a place for money to pass through... it should not be a place to make your fortune, and as it continues to lure away our greatest minds, we will all be poorer for it. It has all become a grand tragedy of truly biblical proportion.Fuzzy Dunlopnoreply@blogger.com