Readers Ready to Bail on Banks
The problems with bank losses are so severe that the incoming Obama administration may have to send more money to financial institutions and less to individuals, small businesses and municipalities, David Cho, Binyamin Appelbaum and Lori Montgomery write today.
Our Readers Who Comment are not happy about this. Some are angry at the banks and see no reason to continue propping them up. Some are angry at the government for wanting to help people instead of just letting the financial masters do their magic with the result that good things will trickle down to the masses.
The conversation that has resulted predictably contains some verbal rock-throwing.
We'll start with firstname.lastname@example.org, who summed up what many readers said in asking, "what did the banks do with those bailouts?"
castillomark wrote, "The "bailout" is another folly that needs to be stopped in its tracks. Enough! These criminal entities should fail... Put the bailout money into creating honest work for honest pay...not these artificial Ponzi schemes that benefit only a minuscule few."
jhough1 asked, "What is the accountability? Are any dividends still being given? Are the old managers fired? But the striking thing is that the issue of accountability is not even discussed in this articler..."
But debbieqd wrote, "I can't believe the lack of insight on the part of those commenting here. This is economics 101, folks -- even though it's very unpleasant. IF THE BANKS FAIL, YOU FAIL!!!! Remember Lehman Brothers.... Give them the money NOW! Then, fix the system and begin regulation."
bradhilt suggested, "...Want to fix our economy? Simple. Drop corporate taxes, give BIG breaks for research and Mr Government, get out of the way cause business and our economy will flourish... Obama can not change reality or history. The words "hope" and "change" do not raise the value of stocks."
billisnice wrote, "All these companies need is FUEL to run. Where does it come from? The consumer. As long as consumers do not have decent jobs with benefits and affordable health insurance these companies can not exist without a constant influx of government money. What is the solution? Help consumers and eventually all will be well."
biswashira said, "True, the bank losses are overwhelming. It is also true that there are tons of money are sitting in the sideline. A lack of money is not the problem. The problem is lack of rules and regulation for the market in USA and everywhere else. Another problem is a lack of untainted cabinet officers and regulators for the market..."
donnolo wrote, "If I had a dishwasher that worked as badly as our financial system, I would get a new dishwasher. If I had a TV set that worked as badly as the stock markets, I would throw it away. If I had a car that worked as badly as capitalism, I would junk it."
amchitka7 asked, "Who is telling the truth? Will anyone go to jail. I don't know who to belive anymore."
sfmaster wrote, "Having opposed the bailout from the very beginning, i'm not surprised that our financial system is in such dire straits...I believe that continuing to prop up these banks is a losing proposition: we are throwing good money after bad. Citi and other should be allowed to go out of business."
postfan1 said, "...It's pretty simple, really. If they don't loan money, and are scared to invest, how are they going to make any money? Because of TARP, they can just sit on their fat salaries for a while. Tie their incomes to their LONG TERM performance, and things will change."
Calabrese99 wrote, "It amazes me that bankers and investors are in much better shape vis-a-vis the government than are citizens with homes under foreclosure. Now foreclosure fraud is rampant further ripping off defenseless people...The government responds to the monied interests while letting ordinary citizens out in the cold. For shame."
tjhall1 recommended, "Here's a clue: LET THEM FAIL. They allowed financing of homes without credit checks or money down, so TAXPAYERS have to bail them out???"
cpwash wrote, "Rescue banks? No. Rescue the lenders instead. Do this as follows: Allow mortgage lenders to refinance at the Fed's discount window. Why pay 5.5% interest on a mortgage when the Fed will loan a 0.5%? Why are we keeping the banks afloat?"
lidiworks1 said, "The only way to fix this is to help the public for a change. This isn't about handouts. These big companies wouldn't exist if they didn't prey on the needs of the average citizen in the first place and until something is done about the financial situation of the average person, this economy will continue to stagnate. You can't squeeze blood from a turnip."
We'll close with a pair of comments that reflect the opposing views readers have on this topic.
First, alexandrahamilton wrote, "There is not enough money in the world to make up for all the losses of the banks. The financial system is dead. Every Dollar you give them now is wasted. If the banks fail, the banks fail and that's it. It is the Feds job to continue to provide services the citizens need in that event..."
But banquosghost said, "I understand all this bitterness. But letting lots of banks fail, even if they have themselves to blame, will have catastrophic results for every American. We are already headed towards something that could look and feel a lot like the depression and no one's financial livlihood will be unaffected."
All comments on this article are here.
January 15, 2009; 7:34 AM ET
Categories: Bailout , Economy Watch , Fed , Treasury | Tags: Bailout, Economy Watch
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