IMO...if a bank cannot pay it's own way then it's not a viable business. Banking is PRIVATE enterprise and as such should stand on their own merits. Why doesn't the government give free cash to all other businesses? If the government wishes to fund private banking, then the government should nationalize banking and be done with it...one bank...The Government Bank of the USA...
Don't see what any of you post has to do with mine, but generally yes, as with any other business. A bank, like any other business, can have short term cash flow problems resulting in the inability to temporarily pay its way, but still be a viable business in the long term. I agree with that, if we 1) don't let banks get so big that their individual failure would result in a catastrophe for the economy, and 2) the bank's insolvency is temporary and part of a systematic economic crisis not of the individual bank's doing, such that a string of such bank failures would result in a catastrophe for the economy. Just as with banks, the Govt lends cash to other corporations on rare occasions where the failure is viewed as temporary and the judgement is made that the long term consequences of the failure outweigh the cost of temporary loans.
If a business, including a bank, needs a line of credit, then borrow it and show it on the books. Banking should be nationalized and be done with all this nonsense...
If a bank has to maintain 100% reserves it has no money to lend and no reason to exist. As a Private enterprise banks can do what they want with their money. How much of their deposits they lend out is their PRIVATE business. If they have insufficient reserves on hand to meet depositors demands for withdrawals it is simply the result of poor business decision making, like any other private business that becomes unable to pay its obligations. The government does not give money to banks, neither does the Federal Reserve. If a bank is running short of reserves it can present financial instruments at the Fed to trade for cash. The Fed discounts these instruments and provides only a percentage of their value when it accepts them in trade, taking complete ownership. The Fed can at any time require banks to redeem these instruments at face value or sell them on the open market. Trading at the Fed's discount window is a very bad deal for banks but, as last resort when all other paths are foreclosed, it does prevent the sort of cascading bank failure panics that were such a regular feature of the economy before. To put it simply, the Fed is the last backstop against the economic catastrophe of widespread bank failure and without it the US economy would return to the good old days of regular bank runs and economic panics that wipe out the savings of millions overnight. It is all well and good to want to nationalize the banks but that would put the entire economy into the hands of government bureaucrats. if you think getting a loan is hard now......
Well, if modern financial policies have led to massive debts that enslave the people's Government, then there is a need to destroy what has become considered as progress. 18th Century ideas of economics & politics are superior to the ones we hold today IMO. Andrew Jackson (although a 19th Century President) was the best President for the people of the US in history. His opposition to a national bank & a Feberal reserve are very commendable. Not all "progress" is good. And I really dislike politicians that use the term "progressive" to label their policies to fool the people into thinking they have the answer to to day's issues. Often they led many into further chaos.
Governments had debts well before innovations like fractional banking powered the innovation and progress of the 20th century.
This is actually quite easy to solve. The public sector must make up the difference by spending money on investments and jobs that produce a desired long term benefit to the person, the nation and the economy. I think your post is very accurate in stating that progress by definition makes jobs less numerous. The key is to build an economy that allows each of us a chance to participate in a meaningful way. In some eras, the private sector can make up most of that capacity. In other eras, the government must step in to ride out these transition periods.
What's wrong? The financial system and the Fed's Hair of the Dog "solution" to the problem of infinite debt. Our government defaults on its obligations by inflating the currency; it could not afford to function otherwise, as we've seen by the debt limit issue that's now been nullified through the (no doubt indefinite) SUSPENSION of the borrowing limit. When they're not taxing us directly, they're inflating our currency and destroying our spending power. As the level of debt increases, we get increasingly poor (except for the 1%ers who benefit instead).
Well look at the bright side. The 1% has gotten a lot more of the nation's income and wealth, helped in no small part by those tax cuts. If we're going to go down in debt, you must at least feel good we've helped the rich folks get richer in the process of doing it.
Good point. Too narrow. Why would anyone think that increasing tax revenues and having a surplus to pay down our national debt would be a solution to our national debt? It's not like that's exactly what we did from 1993-2000 or anything. But when your goal is to protect the richest's share above everything else, I can see why you'd think it "too narrow."
Given global neofeudalism, the irreversible trend to replace human workers with machines, if not for taxes on the rich being used to redistribute income capitalism implodes. The only way to stop the inevitable implosion, is to reverse automation, add back humans to the economic model, and to once again not seek the cheapest widgets, but to price widgets that expand the middle class. That is, we make what we consume here, we only use robotics and automation for high tech widgets, where they are essential and we create an economic model that doesn't send more and more of the income pie to the top. If the automation and neofeudalism continues on, which of course it will, either the rich elites will be taxed at higher real rates as ww2, or they will be hanging from oak trees and society implodes. And you have no way out of it. So, you might better agree to redistribute income by taxation on the rich, or sit back and watch the implosion. For you really have no other choice in this matter. There is an unavoidable hard problem here that you can ignore, in hopes that it just goes away, but it is a given, just as much as gravity is a given.
I have thought for a while that another bigger financial collapse could be on the way. I heard a report on the radio that that this could be a big risk if the FED get the timing wrong on their interest rate policy in the next few months. The presenter suggested that the economy, whilst seemingly strong and certainly reported as such is potentially quite fragile. I have thought that the Financial reporters that keep giving excuses for the occassional apparent wrong trends in pieces of financial news are actually covering up reality. To me there have been too many excuses lately. They need to stop, for me to get comfortbale again. In my past life as an execuitve when an executive, including me BTW, made an excuse for a bad result once, it usually was a hiccup, a bad result twice you could probably accept that too. But when it got to the third even if they weren't consecutive, but, lets say in 6 months, then you need to start looking closely. That is where I think we are at. We need to start questionning and looking closely.
As an executive in a private company I'm guessing you didn't have a body of people who could and did block and obstruct your policies and programs.
Interesting comment, because I think you are making a general assumption about how all public companies in the world are run and managed, not so, I perceive
I doubt many have the political mechanisms in place equivalent to trying to get laws passed by the Govt. The president has far less unilateral power to pass law than a typical corporate CEO.
What you say is probably true, but, you see, I don't see that companies should employ people to do this, as they seem to do in USA. 'We the people' have representatives who are supposed to do that for us. Companies should do the same and have no more or less power than me as a voter. Maybe this is blue skyish and contrary to the current American Way. But, maybe there would be more trust of government and by people if this was the case.
Payroll employment increases by 214,000 in October; unemployment rate edges down to 5.8% Source: U.S. Bureau of Labor Statistics Employment Situation Summary USDL-14-2037 Transmission of material in this release is embargoed until 8:30 a.m. (EST) Friday, November 7, 2014 Technical information: Household data: (202) 691-6378 * cpsinfo@bls.gov * www.bls.gov/cps Establishment data: (202) 691-6555 * cesinfo@bls.gov * www.bls.gov/ces Media contact: (202) 691-5902 * PressOffice@bls.gov THE EMPLOYMENT SITUATION -- OCTOBER 2014 Total nonfarm payroll employment rose by 214,000 in October, and the unemployment rate edged down to 5.8 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in food services and drinking places, retail trade, and health care. Household Survey Data Both the unemployment rate (5.8 percent) and the number of unemployed persons (9.0 million) edged down in October. Since the beginning of the year, the unemployment rate and the number of unemployed persons have declined by 0.8 percentage point and 1.2 million, respectively. (See table A-1.) .... In October, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 2.9 million. These individuals accounted for 32.0 percent of the unemployed. Over the past 12 months, the number of long-term unemployed has declined by 1.1 million. (See table A-12.) The civilian labor force participation rate was little changed at 62.8 percent in October and has been essentially flat since April. The employment-population ratio increased to 59.2 percent in October. (See table A-1.) Read more: http://www.bls.gov/news.release/empsit.nr0.htm President Obama ends Bush's Great Recession but is viewed as a failure. Had it been the reverse with Dems creating a recession and Republicans creating 200,000+ jobs every month it would be viewed as success. That's today's Orwellian social double think for you.
Here's what's gonna happen. The economy will continue to grow for the next two years but wages will not increase because the Fed will raise interest rates next year to "remove inflationary pressure" which means increasing interest rates to slow economic growth and increase unemployment just enough to keep wages down but not enough to prevent the markets from prospering. The republicans will regain complete control of the government in 2016 and remove financial regulations which will create an economic bubble that will explode in 2022, which is far earlier than they hoped. The democrats will once again take over as they have in every election during an economic crises since 1932. The inherent stupidity of the US electorate will return the republicans to complete power 8 years later and the cycle will commence again.
Nice to see someone else who sees a great problem looming for capitalism. Yet you can hardly get anyone to think about it, for they don't want to see the end of capitalism as a means to provide for a population's economic needs. I have run into this mindset for years. Yet given the trend of replacing humans with machines, for better profits, and profits drive capitalism, this system will implode. But some people are thinking about it, yet few even know about this. Thankfully we do have a few who are thinking about it and will have ideas when the implosion inevitably occurs.
O Whilst what you say seems entirely plausible, wouldn't it be better to have a thrid large party to counterbalance this insanity.
Yeah, these cycles caused by the stupidity of the politicians, and the idiots who put them into office. We have a model already that worked quite well, for most of the people, regulating the banks, demanding social responsibility from corporations. But that doesn't allow either to max out profits, and it is only a matter of time before the pro business, pro banking party, will change that paradigm. And then the crash cycles begin all over again, as americans die off, and then forget what happened in the past when bankers and corporations were allowed to write policy that pertains to themselves.
