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prawn_86 said:
M34N,

That is what needs to happen for the mistakes of the past to be learnt. Capitalism hasn't failed, merely the management of it has. Profits have been privatised while losses are socialised. For it to work properly you need a true free market, even if it means millions of unemployed. That will ensure in the future the business' are sustainable
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Normally I would agree with you on this, prawn, but I personally think the situation at the moment has gotten so bad that government may have to consider it to prevent the whole system (read: not a single company) from collapsing. Those that were not responsible are getting caught up in this mess, the mistakes of a few are now everyone's problem and this is where I feel capitalism has failed.

Regulation needs to be tightened to prevent it from happening again, but I'm talking about fixing the current problems and not those that may happen in future. The problems we have now are way too serious to just let them unravel as they are, there has to be intervention and maybe government intervention now will make up for the lack of it over the past 5 or so years?

Either way the repercussions of doing nothing by government now will be far worse than what nationalization may achieve. :2twocents
 
M34N said:
Normally I would agree with you on this, prawn, but I personally think the situation at the moment has gotten so bad that government may have to consider it to prevent the whole system (read: not a single company) from collapsing. Those that were responsible are not getting caught up in this mess, the mistakes of a few are now everyone's problem and this is where I feel capitalism has failed.

Regulation needs to be tightened to prevent it from happening again, but I'm talking about fixing the current problems and not those that may happen in future. The problems we have now are way too serious to just let them unravel as they are, there has to be intervention and maybe government intervention now will make up for the lack of it over the past 5 or so years?

Either way the repercussions of doing nothing by government now will be far worse than what nationalization may achieve. :2twocents
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I agree , I think economic theory as right as it may be must take a back seat for now while efforts are made to prevent a catastrophic event, and I think we're fairly close to that point.

I've no faith that future Govt's will learn from this, politics just get in the way.
 
I can appreciate your viewpoint M34N and see what your saying.

I would argue however that regulations need to be relaxed if/when we do get through all this. A true laisse fairre (sp?) system: one tax rate, no deductions, no political lobbying/donations allowed, no breaks favouring certain industrys etc etc

Never going to happen though...
 
rubbish.

bailouts and nationalisation are the same thing. saving companies who calculated their risk by including the knowledge that should things go bad they are 'too big to fail' and they would be rescued.

by not allowing creative destruction the governments are dooming the world to a far longer economic turn down then necessary.

how will nationalisation solve anything? how will keeping bad debts alive and inefficient companies operating lead to future growth?

someone has to pay one way or another. all the current plan does it take bad debts and inefficient companies and make them public liabilities. the capitalists who made poor decisions are saved and generations of taxpayers foot the bill.

the current situation isnt a problem, its a solution. the cause of the current situation is the problem - poor investment decisions, inefficient manufacturing practices and negative saving rates.

the world has to change as some of you point out. governments say it has to change. yet everything is geared at keeping it the same as it was before.

bailing out bad firms creates a moral hazard, which was part reason for the miscalculation of risk and the problem of the 'boom times'.

trying to stop the current solution is impossible and disregards the changes that need to occur.

i for one do not want to be paying massive tax and coping with high inflation for decades because some firms were deemed 'too big to fail' and acted as such.
 
5000 on the Dow


500 on the S&P 500, and


900 on the Nasdaq.
Today, Dow 5000 may seem far away. But with the Industrials closing at 7063 on Friday, it's actually relatively close: All that's needed to reach 5000 is another 29 percent decline ”” a modest move in contrast to the massive wipeouts already witnessed in the shares of our nation's largest banks.

And in America's Second Great Depression, the averages could easily fall to even lower levels.

Even worse Mr. W. Capper getting elected to the Qld government???
 
I have to agree with you too S Norman but there doesn't seem to be an easy way out.

Perhaps go back to my original thoughts and that is perhaps all the billions should have been put aside for social benefits and just let the whole thing go belly up.
 
MrBurns said:
I have to agree with you too S Norman but there doesn't seem to be an easy way out.

Perhaps go back to my original thoughts and that is perhaps all the billions should have been put aside for social benefits and just let the whole thing go belly up.
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the billions should not be borrowed. every dollar the government takes in borrowing is $1+ interest future generations have to repay and reduce their spending because of.

welfare produces nothing.

work on freeing up credit markets. if anything borrow money and create enterprise banks, looking to lend to entrepreneurs who have profitable ideas and products.

at the moment any profitable idea is being ignored for the benefit of unprofitable firms 'too big to fail'.

unfortunately governments are too big to not interfere.
 
MrBurns said:
I have to agree with you too S Norman but there doesn't seem to be an easy way out.

Perhaps go back to my original thoughts and that is perhaps all the billions should have been put aside for social benefits and just let the whole thing go belly up.
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Well that's the thing, you either prop up these companies now with taxpayer money for them to survive into the future and keep people employed, or risk having all the people employed by this company, and the countless millions who are employed thanks to those companies and their debts that they owe losing their jobs. In other words, have millions unemployed collecting the dole or have them employed and making a living and eventually having them turn a profit and return to 'normal'.

There is no perfect solution I agree, but I feel this is the best solution. Ideally, like prawn said earlier, it should of never happened in the first place and steps should be taken to ensure it never happens again. But that's too late, and if people here are comfortable with millions losing their jobs around the world, and worse things to come (even potential wars etc), then that's not good enough in my opinion. Another great depression in the making and government sitting on their hands and doing nothing is not acceptable IMO. :2twocents

But each to their own and everyone has their opinion :)
 
Stormin_Norman said:
the billions should not be borrowed. every dollar the government takes in borrowing is $1+ interest future generations have to repay and reduce their spending because of.
welfare produces nothing.
work on freeing up credit markets. if anything borrow money and create enterprise banks, looking to lend to entrepreneurs who have profitable ideas and products.
at the moment any profitable idea is being ignored for the benefit of unprofitable firms 'too big to fail'.
unfortunately governments are too big to not interfere.
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I meant put the money aside for the million or more that will be out of work.

The money has to start flowing again, but I think it's almost too late, they're not going to do it.
 
bailout and the dole are the same thing.

one costs the government bucketloads while u work.

the other costs the government bucketloads while u watch days of out lives.

workers going to work are costing future generations. they must be employed by profit making firms, because loss making firms are of no good to anyone.

small business has provided 80% of job growth over the past 5 years.

this policy where the government is taking their access to credit to save the 20% is the problem.

while a company sacking 2000 workers may make news for a week, a company laying off 2 workers wont. given the statistics for every 2,000 job losses a large company makes, there's the potential for 8,000 small business jobs to go.

bailing out the big companies who run at loss at the expense of small, innovative small companies is criminal.

but the current debate is all about what can be seen. and what makes papers is politicians falsely claiming solutions and inefficient companies succumbing to their problems.

lets not take the good down to save the bad.
 
MrBurns said:
No, with the dole the companies get wiped out, with a bailout they don't........well not this year maybe.
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did you read the remainder of my point? youre agreeing with me.

its merely delaying the inevitable for these companies. causing efficient ones to struggle for credit.

might as well drop the economy into the florida everglades.
 
Stormin_Norman said:
did you read the remainder of my point? youre agreeing with me.

its merely delaying the inevitable for these companies. causing efficient ones to struggle for credit.

might as well drop the economy into the florida everglades.
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Yep we do agree - What I'm saying is if they let the companies go under and used the money they would have used to bail the company out on the dole for those that become unemployed that might be better than propping the company up - same expense but one option lets the company go under as it should.
 
Stormin_Norman said:
did you read the remainder of my point? youre agreeing with me.

its merely delaying the inevitable for these companies. causing efficient ones to struggle for credit.

might as well drop the economy into the florida everglades.
Click to expand...

Sorry norman I must admit I read that first part and not the rest - at work ATM and typing this inbetween other things :)

Glad we agree, either way the road ahead is not good and I think no matter what happens from here on will still lead to job losses - it's just how many there will be that is affected by these 'bailouts' or the 'nationalization' of private companies.
 

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