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Fortune : Don't believe the populist hype (The Government Bailouts were Absolutely Needed!)
Fortune ^ | 07/16/2010 | Becky Quick

Posted on 07/16/2010 2:20:16 PM PDT by SeekAndFind

Beware the revisionists. It was bound to happen eventually, but here we are, less than two years after the U.S. faced its worst financial crisis in decades, and a steady stream of politicians routinely take to the airwaves to declare that the government overreacted with the $700 billion TARP plan and ripped off the taxpayer. That the incredible interventions by the Federal Reserve and the Treasury weren't necessary. That we should have taken our lumps and let the chips fall where they may.

Yeah, right. Jimmy Dunne, senior managing principal at investment-banking firm Sandler O'Neill, summed up my feelings perfectly when I asked him recently what he thought of those politicians: "They're idiots," he said.

Dunne is one of many who watched the meltdown from a courtside seat. "You had to be at your desk every day, but there was just this feeling of hopelessness, like there was nothing you could do," he says of those dark days in the fall of 2008. "You just had this feeling in your stomach that if the government didn't stand up and say, 'We will be there,' the whole thing would be crumbling down."

Why would things crumble? Because our financial system is one that operates on the idea of faith. Faith that institutions will back their promises, that people will pay their bills. And this nation went through a period where everyone questioned that faith. Institution after institution came right up to the edge of collapse -- and some plunged off: Bear Stearns, IndyMac, Lehman Brothers, Fannie Mae, Freddie Mac, AIG (AIG, Fortune 500), Merrill Lynch, Washington Mutual (WAMUQ), Wachovia. The most frequently asked question on Wall Street back then was: Who's next? And in that environment, everything shuts down.

(Excerpt) Read more at money.cnn.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: bailouts; government; marxistpropaganda
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1 posted on 07/16/2010 2:20:18 PM PDT by SeekAndFind
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To: SeekAndFind

Author uses an analogy :

“It’s like going to a party and being told 10 out of the 40 people there have a contagious disease, You don’t know which 10. Are you going to shake anybody’s hand?”

That’s why the government had to step in and take such extraordinary steps, from backing the credit markets to insuring money market investments to raising the FDIC’s deposit insurance to $250,000 per bank account. Combined, those moves helped stop the run on the banks and kept the panic from spreading.

Those who think the financial system’s collapse would have hurt only Wall Street fat cats are fools — or terribly naive. When major companies can’t get funding, they can’t meet their payroll obligations. Some major companies including a few Dow components — might have fallen into that camp back in the autumn of 2008 when the credit markets seized up, leaving hundreds of thousands of employees without a paycheck. It would have immediately trickled down to smaller companies across the country.


2 posted on 07/16/2010 2:21:45 PM PDT by SeekAndFind
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To: SeekAndFind

B/S! Socialism never works! Show me where the constitution says that the tax payers must bail out the bankers!!


3 posted on 07/16/2010 2:24:23 PM PDT by Jim Robinson (JUST VOTE THEM OUT! teapartyexpress.org)
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To: SeekAndFind
Nice work if you can get it. Taxpayer billions at zero invested in treasuries at 4.

What exactly is it that limits the risks that too big to fail companies are willing to take if the taxpayer bails them out whenerever required?

4 posted on 07/16/2010 2:25:02 PM PDT by jwalsh07
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To: SeekAndFind

Author gives the following arguments as to what would have happened if there were no bailouts :

* Unemployment, which is dogging our nation right now with an official rate just under 10%, could have easily risen to 25% and beyond, just like during the Great Depression.

* The disruption that would have played out if the banks had frozen up would be disastrous. During the height of the crisis, The author was joined on the Squawk Box set by a guest host whose firm now manages over $1 trillion in assets. During one commercial break, he confessed that he had recently told his wife to go to the bank and take out as much money as possible, because he wasn’t sure the ATMs would be working the next day.

* The smartest people, the ones with the most intimate knowledge of what was happening in the markets, all thought things were even more dire than government officials were letting on at that point.


5 posted on 07/16/2010 2:25:40 PM PDT by SeekAndFind
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To: SeekAndFind
The purpose of the bailout was for maximum exploitation of the crisis to consolidate more power in the government/labor union/corporation complex.

And to enslave the peasants.

6 posted on 07/16/2010 2:25:40 PM PDT by E. Pluribus Unum ("The only stable state is the one in which all men are equal before the law." -- Aristotle)
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To: SeekAndFind

Another brainwashed Demboslut parroting moron heard from.


7 posted on 07/16/2010 2:26:17 PM PDT by DGHoodini (Iran Azadi!)
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To: SeekAndFind

There was no run on the banks, that was recently proven to be a total BS hoax to justify the stealing of 800 billion dollars.


8 posted on 07/16/2010 2:26:30 PM PDT by stockpirate ("I am a Muslim first, an American second." Barack Obama Dreams of My Father)
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To: SeekAndFind

I disagree. That trickle down feeling I have now is the government draining my bank accounts.

Why should all of us support the few that basically perpetrated fraud? Why should all of us support overly generous pension systems that can’t support themselves?

Where the hell is MY bail-out?


9 posted on 07/16/2010 2:26:46 PM PDT by SouthTexas
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To: SeekAndFind

Rebellion is brewing!!

Party like it’s 1773!!

Throw the bums out. Every damn socialist, statist and big government political whore!!


10 posted on 07/16/2010 2:26:49 PM PDT by Jim Robinson (JUST VOTE THEM OUT! teapartyexpress.org)
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To: SeekAndFind

Bologna.


11 posted on 07/16/2010 2:28:11 PM PDT by Oldeconomybuyer (The problem with socialism is that you eventually run out of other people's money.)
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To: SeekAndFind

I’d be happier if AIG had been parted out and if Goldman Sachs had been terminated too. Fannie and Freddie should’a been terminated too.


12 posted on 07/16/2010 2:28:16 PM PDT by Paladin2
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To: SeekAndFind

Tarp wasn’t bad ...it was just a temporary prop up and Banks paid it back Remember the gov buying up the S& L mess under Reagan? ....Stimulus under Obama and everything else is what has really hurt.


13 posted on 07/16/2010 2:29:15 PM PDT by woofie
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To: Jim Robinson

Fortune magazine used to be a capitalist publication. Now, it’s a crony-capitalist publication.


14 posted on 07/16/2010 2:30:24 PM PDT by downtownconservative
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To: stockpirate
There was no run on the banks, that was recently proven to be a total BS hoax to justify the stealing of 800 billion dollars

What about the collapse of such huge banks as Wachovia, Citibank, Washington Mutual and others ? Had the government not stepped in, what do you think would have happened to the money of depositors and what would the flow on effect have been ?
15 posted on 07/16/2010 2:31:36 PM PDT by SeekAndFind
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To: SeekAndFind

Regardless of the benefits, which are speculative at best, the bailout has enabled continued corruption and incompetence. If the consequence of failure is profit, there’s no incentive to change.


16 posted on 07/16/2010 2:33:42 PM PDT by Spok (Free Range Republican)
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To: SeekAndFind

What about the constitution? What about our freedom? What part of Up Yours BIG Government do you not understand??

Rebellion is brewing and this bailout crap was the last straw that started it!!


17 posted on 07/16/2010 2:34:41 PM PDT by Jim Robinson (JUST VOTE THEM OUT! teapartyexpress.org)
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To: SeekAndFind

Banks that are corrupt need to fail, not get bailed out. The reason for the problems in the first place was the CRA, and that hasn’t been changed.

All we did was give a bunch of thieves the keys to our money. Insured accounts would have been covered. Failed banks would have been bought up by successful banks and asorbed.


18 posted on 07/16/2010 2:35:22 PM PDT by stockpirate ("I am a Muslim first, an American second." Barack Obama Dreams of My Father)
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To: SeekAndFind
Why would things crumble? Because our financial system is one that operates on the idea of faith. Faith that institutions will back their promises, that people will pay their bills.

I see. Faith.

Faith that the Ratings Agencies could be trusted when they evaluated the vaporware residuals on worthless morgages, you mean?

19 posted on 07/16/2010 2:35:36 PM PDT by Gorzaloon (CNN:AP:etc:Today, President Obama's stool was firm and well-formed. One end was slightly pointed. ")
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To: SeekAndFind

Who is Becky Quick and why should I care what she thinks.

G/S next to AIG were resposible for this mess, and they just got off scott free. The taxpayers get screwed yet -—AGAIN.


20 posted on 07/16/2010 2:35:36 PM PDT by Marty62 (marty60)
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