And innovation in banking does not exist.

It only serves the purpose of making more money for stakeholders while 99% if population goes into debt-slavery.

The government had to backstop something crazy like $23.4 Trillion in assets of questionable value. Had they not backstopped those bogus trades most of the companies that they are trying to dictate pay limitations to would be bankrupt anyhow.

How can you give someone hundreds of billions or trillions of Dollars of leverage to save them from their own stupidity, and then not want to apply some forms of limitations to them?

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

Then I could beg all I wanted but it wouldn’t make a difference.

I know you colonials are always slightly behind with happenings in the mother country, but you rather missed the point.

What got our dander up was that it was the banks we taxpayers bailed out that wanted to pay the massive bonuses.

Now we did politely suggest this really wasn’t cricket, but they bally well went ahead and did it anyway. Only a cad would do that sort of thing. They should have remembered Harold Wilson’s famous maxim of “You don’t kick your creditors in the balls”, because we kicked back.

And as for your comment that religion is dead in England – that’s absolute tosh, we have mosques springing up everywhere! And anyway, everyone knows that God is an Englishman.

regards

Marchamont

But in fairness, there were problems in a system that bankrolled the debt to begin with. The fault lies more with Government though; a Government in the United States that didn’t limit that sort of bad borrowing to begin with. Here in Australia, it couldn’t happen, and didn’t. It’s why 2 Australian banks are in the top 10 globally now, and our system didn’t need bailing out. And it’s also the fault of Government who bailed out the banks who were stupid enough to make the high risk loans to begin with.

The whole point of free enterprise is that you’re exposed to the risk as well as the reward. What the US Government has done here is rewarded the bad lending practices; in a free market economy, those stupid enough to make those loans would have died off, and those who didn’t would prosper. Instead the US economy rewards failure now.

Government should limit lending to those who can’t afford it on a social basis; that’s not about protecting business, but the consumer. And if they don’t, they shouldn’t reward those who make the loans to begin.

-I was scanning the comments and thought when you said, “Ah but victor! You may not realize this, but 30 years ago (hell, it was probably 15 years ago) you needed to come up with 30-35% of the cost of a house in cash if you wanted to buy it.” that you were arguing for higher standards in lending, but now I see you were citing that as an example of an innovation. But still, to get back to your original post you say,

“The pay of executives is not what caused the recession. What caused the recession was people buying a payment, rather than house, getting in over their head, inflating housing prices and now defaulting in droves.”

-If we accept that that is what caused the shitstorm we are currently experiencing and you are against regulation of the practices that are involved in the lending/buying process, then how do we prevent this from happening again? Like I said before, people are not going to control themselves. There are many smart people out there who will not overextend themselves, but the majority of them will. You are right, the example of regulation I used was not a good one. Obviously there would need to be other things factored in, such as income, payment history, credit, etc. My point was not to produce the exact final form of the regulation, but just to give a quick example citing what I thought you were already saying. I see your point that the lending/buying process is only the business of the lender and buyer on a certain level, but if we are accepting that this activity can have such a great impact on the whole nation, then I feel that some regulation is called for.

“But I will say that Government has no place in deciding how much private citizens can make.”

-I agree with you on that, but my comment/question to you was,

“I also think you are mixing clawbacks from the bankers with regulation of banking practices. What I mean, is that though you are correct that the “mob” wants to see the bankers punished for being overly greedy, I think that everyone would be happy enough if something were done so that these types of things were prevented from happening again in the future. Which means regulation of practices involving these secret derivatives the bankers are once again engaging in. I’m not talking about regulating the amount bankers are paid, but instead the methods by which they make money. You seemed to focus mostly on the regulation of the amount of money made, as opposed to the methods used to make the money so I don’t know where you fall on that. Would you not agree that one should have to provide some value in order to earn money and that these derivatives provide very little in actual value to anyone but themselves?”

Great discussion man.