I had hoped that they would be properly refactored so that the people could benefit from that change instead of the corporations. Maybe if that had happened the correction our house pricing so desperately needs could have happened.
Yeah sure, the government had to step in to prevent an even bigger catastrophe. But if indeed it were the case that the people responsible were even for a moment under any threat of actual punishment for their crimes, it would not have all been swept under the rug, and the people in charge simply finding employment elsewhere.
When the working class is bankrupt or in debt peonage, it takes out major parts of the economy.
I say this as somebody who graduated college in 2010 with fairly minimal debt that I've already paid off. I was extremely lucky in my choice of career (and knowing I wanted to do it at the time) and I made better choices than most with regards to picking colleges and what school I attended, and so it kinda pisses me off a little bit--but me being pissed off is distinctly secondary to we have saddled two entire generations with impossible debts in the chase for "employability".
There shouldn't be (considerable) debt going into dead-end college studies.
Sure. So... do the bankers go to jail?
Nope. They get bonuses.
It's a great scam. They play with your money. If they lose, oh well, the government will bail them out. If they win, they keep the money. And either way, the people in charge get large bonuses.
Only Iceland chose to charge the bankers who engaged in predatory / illegal behavior. Every other country pretty gave them a handshake, and a pat on the back.
And it's still ongoing.
https://www.forbes.com/sites/mikecollins/2015/07/14/the-big-...
Look, if the bank is "too big to fail", by all means bail them out. But nationalize it, fire the idiots in charge, and sell off the assets to people who aren't robber barons.
After that, the government offered to buy assets from banks to ensure they had enough cash to keep doing business (TARP). Every bank was asked to participate because the government didn't want to single out the weakest ones. They were concerned the stigma would drive away business and push them over the edge. In the end, the government sold off the TARP assets they bought and made another 15 billion dollars profit off that.
The bailouts were not that expensive. What was tremendously expensive was the impact of businesses all around the world shaking in fear of being short on cash and unable to secure a loan. That caused them to reduce spending, but one person's spending is another's income. That caused a spiral of dropping incomes and cutting costs. That's where layoffs, bankruptcies, and wage freezes came from. Government revenue dropped significantly too as tax money comes from sales and income.
Banks should be smaller. Hell, companies in general should be smaller. We have far too many oligopolies and near-monopolies. Not enough competition.
The problem is finding agreement on the specifics. We got a whole slew of new regulations in Dodd-Frank and Basel III, but nobody outside of financial experts know or understand them. The general public doesn't agree on much more than that they hate bankers.
I know there's a few common things often pointed to, like reinstating Glass-Steagall, but there's plenty of disagreement there too. For one, I don't think it would have made much difference in this crisis. The counterparty risks that dominated this crisis were all in the investment sides of the companies anyways. It seems more like a pet cause than an actual solution.
I guess the problem is that politics is broken. Ideally, smart, well-informed people would discuss these things and the public would listen and support the best ideas. That's not how politics works these days, though. Party ideology is basically religion at this point.
Fix the government and everything else flows from there. But, that's easier said than done. The American government is fractured and broken because American society is fractured and broken. It's not clear how to make it whole again.
There's more people affected negatively by irresponsible banks and student loans than those that who were affected negatively who worked for the banks. For example, I know more than a handful of people who were let go from Lehman and are doing just fine. In fact I literally just met someone who today is making a $500k salary. We still have people digging themselves out of debt because they lost everything (tangible and intangibles) due to the 2008 crisis.
> The American government is fractured and broken because American society is fractured and broken.
There's a great theory which is that federal politics is all rooted in local politics. In other words, the reason the federal government is full of assholes is because people let these people get elected at the local level and their natural progression is simply to move up through system to the federal level (usually passing it off as "well it just affects that one town, so what").
I feel that politics in general is a field where sociopaths can thrive. There's a lot of backstabbing, deal making, and pandering I think fits well with that mindset at all levels of government. I think the same could be said for wall street as well.
Secondly, the bailouts the banks received were loans -- they've now been repaid with interest, and the federal government has wound up making a profit.
I'm no banker or Wall Street apologist, the big banks and executives should've faced large punishments for their role in the fraud that triggered the economic crisis.
But we also need to be pragmatic and realize that the Bush and Obama administrations had very limited choices to fix the recession, which was made worse because banks basiclly stopped lending any money.
By all means let's elect politicians who will regulate and break up big banks, but let's not score cheap populism points by deriding economic policy without proposing a viable alternative.