doverhog posted:

Bailing out the banks was necessary but they should have been nationalized at the same time. This would shown the bankers there is a moral hazard to giving our bad loans, and would have guaranteed the tax payers get their money back. Of course that didn't happen because the EU is corrupt and run by the bankers, who do whatever they want and just pass on the risk to the tax payer.

Zeppelin Insanity posted:

Genuine question. Why do people (often, not everyone, of course) blame the banks and bankers more than the governments?

It is the job of any company, including a bank, to maximise in the short term profit. We may disagree with that goal, we may think that certain moral boundaries should be respected, and that even in a purely cold analysis such focus on the short term is counter-productive and idiotic. But our economic system and our culture very strongly pushes that particular set of incentives.

Large organisations also end up not knowing what they're doing. The more levels of abstraction you add, the farther you get from the truth, even if no one lies or misleads the person above them in the hierarchy. And the more layers of abstraction you add, the less transparency in responsibility is there: almost no one who works in a particular company thinks of the big picture, they only care about the set of goals and incentives at their level.

And then there's the fact that most companies are staggeringly incompetent. This includes banks. Most individual people have no clue what they're doing, neither do departments, and neither does the company as a whole. The factors that contributed to the crash are more a result of massive incompetence rather than malice.

Also, what is the alternative? Should banks simply not lend to poor people? I know that personally I've really struggled with things that would have been easy with access to a line of credit. Yes, of course debt can be used as a poverty trap, but it can also be essential in escaping poverty.

Obviously, banks trading complex derivatives without understanding them is in no way defensible, but that is referenced far less often than selling "bad debt".

On the other hand, it is the job of a government to provide stability and prevent crises. If all the systemic and cultural incentives lead companies into making bad decisions, then surely it is the job of a government to counteract them - for example by setting lending standards and minimum reserve rates, or through other prudential regulation?

I don't mean to be all "the banks did nothing wrong!", but to some degree I think that blaming them for everything lets the people I consider more responsible for it off the hook. It really seems to me that most people (not on this forum, just in general) don't place the blame on governments if they can avoid it.

quote:

Also, what is the alternative? Should banks simply not lend to poor people? I know that personally I've really struggled with things that would have been easy with access to a line of credit. Yes, of course debt can be used as a poverty trap, but it can also be essential in escaping poverty.

Zeppelin Insanity posted:

Genuine question. Why do people (often, not everyone, of course) blame the banks and bankers more than the governments?

It is the job of any company, including a bank, to maximise in the short term profit. We may disagree with that goal, we may think that certain moral boundaries should be respected, and that even in a purely cold analysis such focus on the short term is counter-productive and idiotic. But our economic system and our culture very strongly pushes that particular set of incentives.

Large organisations also end up not knowing what they're doing. The more levels of abstraction you add, the farther you get from the truth, even if no one lies or misleads the person above them in the hierarchy. And the more layers of abstraction you add, the less transparency in responsibility is there: almost no one who works in a particular company thinks of the big picture, they only care about the set of goals and incentives at their level.

And then there's the fact that most companies are staggeringly incompetent. This includes banks. Most individual people have no clue what they're doing, neither do departments, and neither does the company as a whole. The factors that contributed to the crash are more a result of massive incompetence rather than malice.

Also, what is the alternative? Should banks simply not lend to poor people? I know that personally I've really struggled with things that would have been easy with access to a line of credit. Yes, of course debt can be used as a poverty trap, but it can also be essential in escaping poverty.

Obviously, banks trading complex derivatives without understanding them is in no way defensible, but that is referenced far less often than selling "bad debt".

On the other hand, it is the job of a government to provide stability and prevent crises. If all the systemic and cultural incentives lead companies into making bad decisions, then surely it is the job of a government to counteract them - for example by setting lending standards and minimum reserve rates, or through other prudential regulation?

I don't mean to be all "the banks did nothing wrong!", but to some degree I think that blaming them for everything lets the people I consider more responsible for it off the hook. It really seems to me that most people (not on this forum, just in general) don't place the blame on governments if they can avoid it.

Zeppelin Insanity posted:

Genuine question. Why do people (often, not everyone, of course) blame the banks and bankers more than the governments?

It is the job of any company, including a bank, to maximise in the short term profit.

blowfish posted:

It should be the job of businesses to make maximum profits no matter what, within the limits set by law.

Orange Devil posted:

Their job is loving up our society, is what you are saying.

Were they born into this job or did they choose to go into this profession of their own free will?

That's why people rightly loving despise bankers.

Pluskut Tukker posted:

There's a load of errors/ mistaken beliefs in your posts so I'm just going to list stuff where you're off in no particular order (and commit some gross generalisations):

0. In Europe, we do generally not agree at all that the job of business is to maximise profits. There is a certain consensus that the job of a company is also to respect its stakeholders: its employees, the localities where they do their business/ have their plants, the countries in which they work and are supposed to pay their taxes, the environment, etc. Obviously there is debate as to how much this should happen, but the pursuit of profit is not generally thought to be sufficient as an excuse for a company's actions.

1. You're conflating the global financial crisis and the eurocrisis. These had different, though perhaps sometimes overlapping, causes and have been resolved in different ways. For obvious reasons, this thread is usually more interested in debating how the eurocrisis was resolved.

2. The global financial crisis originated in the American mortgage market. It was not caused in any way by banks unwisely lending to poor people, and neither was the eurocrisis. There certainly was fraudulent behaviour contributing to the GFC though, from the banks refusing to check whether the paperwork for mortgages was in order, discrimination of minority borrowers, to robosigning, to investment banks selling derivatives of which they knew they were trash
(2a. Also, if you want to help people get out of poverty, it's more effective to give them money than to lend it to them anyway.)

3. Banks going down wasn't even necessarily a consequence of shareholder imposed short-termism. Many German Landesbanken took a bath during the financial crisis, and then compounded their error by investing in high-yielding peripheral Eurozone bonds ( Greece). The Dutch cooperative Rabobank for instance took major losses too. This was not a consequence of shorttermism, it was a consequence of greed and ambition.

4. Wherever they are based, bankers are invariably in the 1%, or usually even in the 0,1% income group with the highest salaries. If you're pulling down 6, 7, or even 8--figure salaries, you don't get to use 'excessive complexity' as an excuse.

5. Finally, governments *have* tried to address the failures in regulation and prudential supervision that enabled the crisis to happen. There are now all sorts of new Stability Boards, supervisory mechanisms, legislation like Dodd-Frank or limits to bonuses. It may not have been enough, but you can't say nothing was done. Speaking generally though , bankers still want their loving bonuses. They're still lobbying for Dodd-Frank repeal and the neutering of oversight, and they still expect to be bailed out when they fail. gently caress 'em.

6. Obviously a lot of blame for the eurocrisis can be put on its hosed-up architecture preventing economic adjustment and leaving banks in the eurozone core with a lot of money and no good place to put it safely and with a good return. So they put that money into Greece instead, or in Spanish or Irish real estate. They *still* had alternatives though: they could have spread their money wider, or chosen to be satisfied with a lower return on their investments, or try harder to find deserving borrowers locally. The fact that they didn't could be called incompetent, but I suppose the Netherlands is not the only country where 'excessive incompetence' can translate into legal consequences.

Geriatric Pirate posted:

You know who else has a choice? Borrowers.

Geriatric Pirate posted:

You know who else has a choice? Borrowers.

GEMorris posted:

loving lol if you want to blame the failings of an economic system on the least powerful actors within that system.

Goa Tse-tung posted:

did they though? I mean we are talking about the subprime lending, right?

Geriatric Pirate posted:

You'd have to be a complete moron to think people are forced to borrow.

Cerebral Bore posted:

Yes, surely in the history of mankind nobody has ever found themselves in a situation where they're forced to go into debt.

To be frank it's kind of hard to respond to this, really, mostly because it makes it a bit too clear that GP doesn't exactly share the same reality as the rest of us.

lollontee posted:

Me, paying half my income on rent: i don't really need to own a house really

Cerebral Bore posted:

Yes, surely in the history of mankind nobody has ever found themselves in a situation where they're forced to go into debt.

To be frank it's kind of hard to respond to this, really, mostly because it makes it a bit too clear that GP doesn't exactly share the same reality as the rest of us.

Cerebral Bore posted:

You'd be more convincing what with your bad attempts at owning people by calling them middle class if you didn't make it abundantly clear that the only points of reference WRT debt you have are the most petty bourg ones possible.

Geriatric Pirate posted:

lollontee posted:

I am in fact 12 years old, and i must confess under this withering barrage of moral argument that I do not in fact, deserve a house as I've voluntarily decided to have a low income by choice. I guess it's because I've read this british newspaper that I've heard is popular among liberals and it's corrupted my mind even though I despise it.

I mean yeah, if I just lived 20 kiloms outside the city proper and spent two hours every day commuting, i would be something. But I've chosen to live among m y betters, and I really have only myself to blame for the amount of rent i pay. I could just live choose to live somewhere really lovely, where I belong. Man, i really need to stop complaining about the people I pay rent to, and start voting for the people who built this modern utopia and own loving everything.

Cerebral Bore posted:

Buddy, if you projected any harder I'd suspect that you are actually a cinema. Still, it's a pretty decent effort at making GBS threads up the thread after you've revealed that you don't know the first thing about how debt works. The better solution would be to slink off and hope that people forget your dumb mistake, but here we are, I guess.

Also it's funny how rightwing blowhards have started falling back on talking about "agency" when they want to justify their hatred of poor people having things. Like, do you really think that people can't tell that this is just the same old thinly-veiled contempt for the poor dressed up in some kind of pseudo-progressive language?

Geriatric Pirate posted:

Yes, these right wing blowhards treating poor people like people instead of like pets that middle-class leftists like to show off when they want to advance some political cause. How evil.

Still missing: A reason why poor people were forced to take loans.

Cerebral Bore posted:

lol dude, this is turning into self-parody at this point. I'd usually say that you can't actually be this dumb, but now I really have to wonder.

Cerebral Bore posted:

Like, the dude's literally going "unlike you I am the one who actually cares about poor people, now explain to me why the poors would ever have to go into debt"

Geriatric Pirate posted:

Yeah, poor people have to take mortgages to live, don't you know anything about the real world?

Alternatively, you think the 2008 subprime mortgage crisis was actually a medical debt or credit card crisis.

I know you think you're doing some masterful trolling effort here whereas you're just making yourself look like an out of touch middle class leftist again who starts posting random poo poo when owned in an attempt to make it seem like you were never serious to start with.

Geriatric Pirate posted:

Uhm greek crisis initially. Though it applies to a large degree to subprime as well. No one is forcing anyone to buy a house or invest in their business with debt. You'd have to be a complete moron (see for example Cerebral Bore) to think people are forced to borrow. Probably because he is a middle class teenager whose parents owned a house and thus he thinks homeownership is always necessary.

Rappaport posted:

This is a part of the gist in Piketty's Capital; the post-war period was a historical aberration where even lower-class European people could actually own something. We are now moving back towards the historical norm where the vast majority of people will live their entire lives hand-to-mouth. You seem to find this a pleasant image of the future, which is a bit baffling, but to each his own I suppose.

Namarrgon posted:

Why?

Cerebral Bore posted:

Naw, I'm just pointing out the sad fact that your purported treatment of the poor as people only goes exactly far enough so that you can blame them for their lot in life.