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Big Bailouts

Getting over ‘too big to fail’ policy

April 30, 2013

Sen. Sherrod Brown, D-Ohio, has the right idea but the wrong strategy. Brown has introduced a bill intended to safeguard taxpayers from having to bail out more “too big to fail” banks in the futur....

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(5)

NobodySpecial

Apr-30-13 7:34 PM

Being an ordinary man in America is starting to feel like S&M... Anybody catch the safe word?!

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AaronS

Apr-30-13 11:49 AM

Too big to fail wasn't as much a concern when Baer Sterns was failing. It wasn't until AIG, which housed the Congressional retirement fund, was on the brink that suddenly 'too big to fail' became an issue and suddenly GWB is willing to 'disregard the free market to save the free market,' Nancy Pelosi and Harry Reid are giving Wall Street Hank Paulson all the money he wanted and the US Treasury was suddenly the safety net for poor banking decisions.

The truth is, Washington (this isn't a party issue, both sides bailed out Wall Street) should have made a few changes such as eliminating mark to market rule then allowed banks to suffer their consequences of their decisions. They didn’t though, they followed that up with a bad regulation that punishes small banks and gives large intuitions’ carte blanche rule to stick it to taxpayers. And now Brown wants to increase the cost to those same taxpayers with more ‘taxes’ that will be passed along to the little man. SMH at the stupidity.

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gorilla

Apr-30-13 11:24 AM

"$500 billion is peanuts".

BAILOUT SUMMARY: Estimated 4/13/2009.

1)Troubled Assest Program (TARP) = $5 billion. 2)Federal reserve Rescue Efforts = $700 billion, 3) Federal Stimulus Programs = $6.2 trillion. 4) FDIC Bank Takeovers = $20.7 billion. 5)Other Financial Initiatives = $1.7 trillion. 6)Other: Additional to AIG = $112 billion. 7)Other Housing Initiatives = $475 billion. Total promised 4/13/2009 = $10.5 trillion.

National Dept is now $16.9 trillion.

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neocurmudgeon74

Apr-30-13 10:45 AM

In retrospect, it looks like regulators could have let more big banks fail during the last crisis, & the economy would have gotten over the shock. & we little guys would be better off.

So The Editor isn't necessarily wrong about that.

But Sherrod Brown isn't wrong either, in my view. I've been thinking for some time that requiring very large banks to keep larger reserves would shift business to the next tier of banks, which are large enough to do most of what we need big banks to do, but small enough that they can be allowed to fail.

(Nothing is that simple. What if several mid-level banks go together on a mega-project that's too big for any one of them alone -- & could bring them all down? Is this the same thing in another form? Does Brown's bill address that -- should it? I haven't time to read the bill.)

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denver

Apr-30-13 4:58 AM

I wonder who he thanks would pay, if the "too big to fail bank" FAILED??

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