Solution to "Too Big to Fail"?

[Fr3shjive]

Everyday in the news we hear about a bank that is insolvent but is "too big to fail" and that if it was to fail it would send the American economy into a downward spiral.

Im against government intervention but what else can we do to limit the size of a corporation so that it doesnt become so large that it can become reckless and irresponsible with out the threat of failure because its "too big to fail"?

At what point do limit the size of a corporation so that it doesnt become a national liability?

[pcosmar]

Why?
Are you buying this bullshit?

[constituent]

Everyday in the news we hear about a bank that is insolvent but is "too big to fail" and that if it was to fail it would send the American economy into a downward spiral.

Im against government intervention but what else can we do to limit the size of a corporation so that it doesnt become so large that it can become reckless and irresponsible with out the threat of failure because its "too big to fail"?

At what point do limit the size of a corporation so that it doesnt become a national liability?

kidding, right?

[Fr3shjive]

Im serious. Im against bailing out these banks but it seems like if these huge banks like Citibank, Bank of America ...etc were to fail it would completely freeze the economy.

My question is should the government step in and limit the size a corporation so that it doesnt become a liability where we're forced to bail them out.

Im not trolling. This is a legit question.

[constituent]

Im serious. Im against bailing out these banks but it seems like if these huge banks like Citibank, Bank of America ...etc were to fail it would completely freeze the economy.

My question is should the government step in and limit the size a corporation so that it doesnt become a liability where we're forced to bail them out.

Im not trolling. This is a legit question.

Absolutely not.... but here's an important thing, you're buying too much propaganda.

Look back to your OP to see what I mean, you framed the whole issue as "if we don't.... economy in a downward spiral," well you see, the economy is in a downward spiral, we have absolutely no need to bailout the banks and have no benefit to gain by doing so.


(So who does benefit? Important question, time to start asking)

Citi or others fail, new money comes in to buy up what remains, the economy gets going again...

("Stabilize" the market? wtf is that, man? The market--at least what we now define as the market--actually needs instability, it's called progress)

Now, we could talk about how government interference actually creates these mega-monsters rather than controlling them, but that's a whole can of worms in and of itself.

[Golding]

Why?
Are you buying this bullshit?There's power in numbers, and there are people who are buying the idea. The best way to counteract it is to have a well-constructed argument against the bailouts. All the OP is looking for is assistance in developing that argument.

[angelatc]

Everyday in the news we hear about a bank that is insolvent but is "too big to fail" and that if it was to fail it would send the American economy into a downward spiral.

Im against government intervention but what else can we do to limit the size of a corporation so that it doesnt become so large that it can become reckless and irresponsible with out the threat of failure because its "too big to fail"?

At what point do limit the size of a corporation so that it doesnt become a national liability?

You don't need to. The natural laws of the market dictate that corporations that get too big will eventually crumble. The trick is in actually allowing it to happen.


Im against bailing out these banks but it seems like if these huge banks like Citibank, Bank of America ...etc were to fail it would completely freeze the economy.

Nonsense. It would open up a plethora of new markets and new ventures, some of which would succeed.

[pcosmar]

There's power in numbers, and there are people who are buying the idea. The best way to counteract it is to have a well-constructed argument against the bailouts. All the OP is looking for is assistance in developing that argument.

Possibly,
And there are numerous threads focusing on free market solutions and the failures of Government programs and bailouts.

I just saw another "first post" looking to justify socialist propaganda. Perhaps I am too sensitive.
I have been Troll Hunting lately. :o

[trey4sports]

ok, two things.

I am disappointed with my fellow RPers right now, when some one comes here with a legitamite question, we should be respectfull and do our best to give an answer instead of condescending sarcasm, there was a time when we didnt know all the answers and I certainly would resent some condescending comment from someone who thinks they know it all.

secondly, the main reasons the banks are unstable is because of gov't intervention, (i.e forced subprime lending) and a host of other non free market issues. gov't created a large problem and now they are trying to correct it, essentially putting off the massive depression we will face eventually.

[pcosmar]

ok, two things.

I am disappointed with my fellow RPers right now, when some one comes here with a legitamite question, we should be respectfull and do our best to give an answer instead of condescending sarcasm, there was a time when we didnt know all the answers and I certainly would resent some condescending comment from someone who thinks they know it all.

secondly, the main reasons the banks are unstable is because of gov't intervention, (i.e forced subprime lending) and a host of other non free market issues. gov't created a large problem and now they are trying to correct it, essentially putting off the massive depression we will face eventually.

Perhaps
I might have been a little quick on the trigger.
In my own defense I offer these.
http://www.ronpaulforums.com/showthread.php?t=179270
http://www.ronpaulforums.com/showthread.php?t=179555
http://www.ronpaulforums.com/showthread.php?t=179557

[angelatc]

Yep....trolls are welcome as far as I am concerned until they start name-calling.

[constituent]

Yep....trolls are welcome as far as I am concerned until they start name-calling.

i don't think he was a troll. "are you serious" is much nicer than Use The Fuckin' Search Engine though, IMO.

[trey4sports]

lets do some introspection here....

what do you want out of this movement?
A. to walk around on an intellectual high horse ?
B. to advance liberty in every way possible?

in the free-market if you want to sell your product, you have to put customer first. We are the retailers of freedom and liberty, and in order to advance our message we need to put the customer first and not assume that every sheep has read Rothbard, and Von Mises.

yse, there are going to be people here who come for quick answers and frankly dont care about using the frickin search button, and if you really care about advancing this movement you will cater to them.....

dont be afraid to swallow your pride if it means a larger freedom base

[constituent]

lets do some introspection here....

what do you want out of this movement?
A. to walk around on an intellectual high horse ?
B. to advance liberty in every way possible?

in the free-market if you want to sell your product, you have to put customer first. We are the retailers of freedom and liberty, and in order to advance our message we need to put the customer first and not assume that every sheep has read Rothbard, and Von Mises.

rofl.

quick tip:

there is no "we."

also, i'm not here to sell a product and the stumblers upon of ron paul forums aren't here to buy.

...speaking of "intellectual high horse"

consider sometime that others might have a different notion of that which best "advances liberty."


oh yea, and drop the "sheep" shit, you'll never sell to anyone you've been calling names.


(introspection, for the win)

[pcosmar]

lets do some introspection here....

what do you want out of this movement?
A. to walk around on an intellectual high horse ?
B. to advance liberty in every way possible?

in the free-market if you want to sell your product, you have to put customer first. We are the retailers of freedom and liberty, and in order to advance our message we need to put the customer first and not assume that every sheep has read Rothbard, and Von Mises.

yse, there are going to be people here who come for quick answers and frankly dont care about using the frickin search button, and if you really care about advancing this movement you will cater to them.....

dont be afraid to swallow your pride if it means a larger freedom base

Oh yeah,
Well this.

The country is collapsing onto itself. I fear the morons here are soon to be my new masters. I can't wait for the days each morning where my children will one day be reciting "We love our freedom and we love god" everyday, on the hour throughout their mandatory private religious school education.
And this,

I dont understand , why you guys mistake , THE LACK OF GOVERNMENT INVOLVEMENT for a SURPLUS of GOVERNMENT INVOLVEMENT .

???
And this,

Comrads .. we need to jump start our economy ...

with rapid industrialisation ....

building factories , colectivise farms ... and instoling cosmodroms ......

We need to start PRODUCING , ALOT OF PRODUKTION !

ITS A NEW CENTURY ... THE CENTURY OF PRODUCTION !

FACTORIES ! POWER PLANTS ! ELECTRIFICATION ! FEELDS WITH AGRICULTURE , COWS ! TRAKTORS !

SPACESHIPS !


STAND UP PEOPLE , LETS BUILD OUR SOCIALIST WORLD !

Kind of got me in a mood.
Add to that the 'stimulus"that was just passed, and the Generally rosy future ahead, and my otherwise jovial nature is getting a bit cynical.
:cool:

[trey4sports]

Oh yeah,
Well this.

And this,

And this,


Kind of got me in a mood.
Add to that the 'stimulus"that was just passed, and the Generally rosy future ahead, and my otherwise jovial nature is getting a bit cynical.
:cool:

do what you like, im just trying to point out how things are from a newbies perspective

[trey4sports]

anyway, that commie dude is probably some jokester. im sure hes not serious

[pa1000]

Everyday in the news we hear about a bank that is insolvent but is "too big to fail" and that if it was to fail it would send the American economy into a downward spiral.

Im against government intervention but what else can we do to limit the size of a corporation so that it doesnt become so large that it can become reckless and irresponsible with out the threat of failure because its "too big to fail"?

At what point do limit the size of a corporation so that it doesnt become a national liability?

well the too big to fail is obviously a lie. but there should no longer be corporate protection. if any of these banks fail the owners still keep their personal belongings and cash no matter how much money the corporation owes to people. the owners of the corporation just need to simply be held accountable the same as every person is for things they do.

[user]

Come on guys, don't be so hard on Fr3shjive. He didn't know and he asked a question.

[Pauls' Revere]

You don't need to. The natural laws of the market dictate that corporations that get too big will eventually crumble. The trick is in actually allowing it to happen.


Nonsense. It would open up a plethora of new markets and new ventures, some of which would succeed.


common sense alert

[The_Orlonater]

Not to mention that bailout money comes from taxpayers or the inflation tax. Through direct taxation, this takes money our of the economy and the certain firm's competitors and gives it to the failing firm. You're taking away progress in one sector to finance failure in another sector.

Book of the thread:Economics in One Lesson by Henry Hazlitt

[Fr3shjive]

Again I wasnt trolling. Im simply wondering what a "free market" solution is to companies that get so large that they can drastically affect the economic security of a company.

Another question for you guys... Should the government regulate the Rating Agencies that, imo, caused this entire real estate bubble? Again Im all for the free market working it's self out but when rating agencies are in bed with the companies they are rating how can you really rely on a so called "rating agency"?

Imo if the rating agencies hadnt given these "toxic assets" triple A rating then this real estate bubble wouldnt have gotten to the magnitude that it did. Wall Street was throwing money at lenders to give loans to unqualified borrowers because investors thought they were putting their money in a secure investment. If the rating agencies rated these assets correctly there is no way that people would have throw so much money at them.

[user]

Again I wasnt trolling. Im simply wondering what a "free market" solution is to companies that get so large that they can drastically affect the economic security of a company.

Another question for you guys... Should the government regulate the Rating Agencies that, imo, caused this entire real estate bubble? Again Im all for the free market working it's self out but when rating agencies are in bed with the companies they are rating how can you really rely on a so called "rating agency"?

Imo if the rating agencies hadnt given these "toxic assets" triple A rating then this real estate bubble wouldnt have gotten to the magnitude that it did. Wall Street was throwing money at lenders to give loans to unqualified borrowers because investors thought they were putting their money in a secure investment. If the rating agencies rated these assets correctly there is no way that people would have throw so much money at them.
Fr3shjive, I'm glad you came here to ask these questions. First, in a free market, it's very difficult for companies to get that large in the first place. With the system we have today, getting large is actually encouraged instead.

In a way, we are all for regulation, but by the market instead of the government. When the government "regulates" an industry, what ends up happening is the business leaders and the government work together to give themselves special favors. When this blows up as it has in the financial industry, they come back to screw us again by making us bail them out.

If, on the other hand, the government never kept transferring our money to the financial industry, never backed them up with insurance no matter what they did, and never bailed them out or even implied that they would bail them out if things went bad, then the kind of risky behavior we've seen on Wall Street either wouldn't have happened or would've caused those who engaged in it to fail. That's real regulation - letting companies that screw up fail and go out of business.

Also, by inflating the money supply, the Fed set the conditions that gave rise to the bubble in the first place.

[idiom]

People say that the market failed to self-regulate and now bankruptcies are the consequence.

That is a failure to comprehend.

In a free market Bankruptcy is the regulation.

If you let big entities fail then in the future the won't screw around as much or become overly inter-dependent.

[Conza88]

Soviet Union = too big too fail. :rolleyes:

[user]

Soviet Union = too big too fail. :rolleyes:
Conza would've supported a bailout of the Soviet Union! You read it here first! :D

[Josh_LA]

Everyday in the news we hear about a bank that is insolvent but is "too big to fail" and that if it was to fail it would send the American economy into a downward spiral.

Im against government intervention but what else can we do to limit the size of a corporation so that it doesnt become so large that it can become reckless and irresponsible with out the threat of failure because its "too big to fail"?

At what point do limit the size of a corporation so that it doesnt become a national liability?

why should a corporation stop anywhere? and why would it fail unless it's not doing what it needs to do?

btw, is Fresh Jive still around?

[Pauls' Revere]

lets do some introspection here....

what do you want out of this movement?
A. to walk around on an intellectual high horse ?
B. to advance liberty in every way possible?

in the free-market if you want to sell your product, you have to put customer first. We are the retailers of freedom and liberty, and in order to advance our message we need to put the customer first and not assume that every sheep has read Rothbard, and Von Mises.

yse, there are going to be people here who come for quick answers and frankly dont care about using the frickin search button, and if you really care about advancing this movement you will cater to them.....

dont be afraid to swallow your pride if it means a larger freedom base

Thanks will do.

and I choose (B)

[Conza88]

Conza would've supported a bailout of the Soviet Union! You read it here first! :D

Non Sequitur. ;)