

U.S. banks told to make plans for preventing collapse - uptown
http://www.reuters.com/article/2012/08/10/us-banks-recoveryplans-idUSBRE87905N20120810

======
chimi
In a mathematical sense, how is what has happened with the US banks any
different than living under a monarchy where the king can take risks at the
expense of the ruled? Isn't escape from this kind of tyranny the reason the
first colonists left England?

I'm feeling very John Galt here. 10% of the country is getting unemployment.
N% additionally is getting subsidized rent, subsidized farmland, subsidized
food, subsidized corporations and banks.

I'm an Entrepreneur and I need every penny. Every penny I keep is reinvested
into a business that creates value for the world. HFT doesn't create value for
the world. Food Stamps. I don't get bailed out when the weather is bad and my
garden dies. I don't have any debt. I don't have a car payment or a house
payment.

I'm responsible -- and I'm starting to wonder, really, what's in it for me? We
are in a drought and our city has banned outside water usage. We can't fill
pools, wash cars, or even water our garden, yet, last night, I go for a walk
with my wife and what do I see? Two little kids playing in a big pool of fresh
clean city drinking water. People don't care enough.

How are we going to fix our society? It's broken fundamentally. It's like
people have disconnected from their role in a larger group of people around
them. We get food from a store sold by someone we only know by a plastic name
tag. We don't grow anything. We don't know anyone except those who work in the
next cube and our family and friends who we don't really _depend_ on unless we
are a struggling recent college grad who can't find a job and moves home and
those stories are mostly not enjoyable tales told by the disgruntled.

The banks have caused immeasurable suffering to millions, tens, no HUNDREDS of
millions of people, perhaps even _BILLIONS_ of people -- and the only banking
employee arrested or tried or even simply just stopped from doing what they
did to cause that pain is a programmer who took some code from Goldman Sachs.
Goldman Sachs itself was cleared of ANY wrong doing in this mess:
[http://www.keyc.tv/story/19239634/goldman-sachs-cleared-
in-s...](http://www.keyc.tv/story/19239634/goldman-sachs-cleared-in-subprime-
investigation)

We have to fix it. It has to be fixed. We can't keep going down this road, but
I don't see anything really changing. Why isn't anything really changing? Why
aren't we having serious existential conversations that really deeply change
our society to one that will not collapse?

Do we really think telling the banks to do it will work? Do we really still
trust them?

I'm really dismayed by all this.

~~~
rayiner
At the core of our problems is the John Galt mentality. The idea that you do
all these things and other people are mooching off it. The idea that we're
anything other than the highly complex and completely inter-dependent society
that we really are.

If you're an "entrepreneur"... you didn't build that. Your employees are the
result of subsidized education. Your customers get to your location driving on
subsidized roads. Your electricity, water, sewage, etc, is all subsidized
infrastructure. You depend on subsidized legal infrastructure to mediate your
interactions with other businesses and customers. If you're a tech business,
then 90% of the theoretical foundations of your business are the product of
subsidized research.

You can't create wealth without community. The only real "John Galt's" in the
world are primitive hunter/gatherers. Romanticized portrayals aside, these
people have no wealth--they constantly live at the edge of death. You're not
John Galt. You're privileged to live in a sophisticated, organized,
interdependent community.

~~~
twoodfin
_If you're an "entrepreneur"... you didn't build that. Your employees are the
result of subsidized education. Your customers get to your location driving on
subsidized roads. Your electricity, water, sewage, etc, is all subsidized
infrastructure. You depend on subsidized legal infrastructure to mediate your
interactions with other businesses and customers. If you're a tech business,
then 90% of the theoretical foundations of your business are the product of
subsidized research._

This isn't an argument. It's rhetoric. If it were an argument, it would
attempt to establish the criteria for deciding whether a particular set of
government programs and the means for paying for them were ideal. Surely there
must be _some_ level of democratically ordained wealth redistribution that
would qualify as "mooching", no?

~~~
rbanffy
The reasoning is flawless.

You need to spend less effort to train your employees because they enjoyed a
certain level of schooling (which, chances are, you enjoyed too). If you don't
need to build your own roads it's because everyone paid for a shared road
system. You don't need to enforce laws yourself because your taxes support law
enforcement. Of course, people who pay less taxes have (or should have) the
same enforcement as you do but that's because of one other thing - that the
law applies equally (or, again, should apply equally) to everyone. As it
should, John Galt or not.

"John Galt" is about self-entitlement. Is about ideas without regard who
actually executes them.

This community, I thought, understands the fact that ideas, without execution,
are worthless. And execution, without employees out of a vastly interdependent
society, is a whole lot harder.

~~~
twoodfin
I also don't need to build and program my own computer because Apple has built
one I like at a price I'm willing to pay. They're part of the "vastly
interdependent society", too. If the scope and cost of government makes it
more difficult or expensive for Apple to produce that computer, then my ideas
become that much harder to execute as well.

It's a tradeoff, and claiming "you wouldn't be able to do it without
government!" doesn't provide any help in determining whether how we're making
that tradeoff today is right. You wouldn't be able to do it without other
entrepreneurs as well.

~~~
rayiner
Nobody is arguing you can do it without other entrepreneurs. The objection is
to the idea "I built that" (used in the same sense as a house I built myself
with wood I cut from my own trees using a hatchet I made from sticks and rocks
myself).

~~~
twoodfin
Nobody ever used "I built that" in that silly _ex nihilo_ sense. It's
sophistry to claim otherwise. They used "built" in the sense of being a
primary, essential contributor.

"Steve Jobs built (and then re-built) Apple" is a completely accurate thing to
say. Do you really want to claim it's false?

~~~
rayiner
> They used "built" in the sense of being a primary, essential contributor.

Do they really? What I hear is them complaining that every cent they are taxed
is the government taking "their money". If they were willing to acknowledge
that they are the primary, not sole, contributor, wouldn't they acknowledge
that some part of their income is not an imposition by the government, but
rather a collection of something the government is entitled to in the first
place by virtue of its contribution?

------
macavity23
_Emphasizing that the banks could not count on government help_

Absolute bollocks. If any of the major banks collapse, there will be a crash
much, much worse than 2008. There is precisely zero chance of government
sitting by and allowing that to happen - and the banks know it.

------
rurabe
In other news, overweight people told to make plans for heart failure.

Too big to fail is the most obvious economic problem of our time. The real
question is why current economic leaders (Bernanke, Geithner, and Obama) have
been so slow to support or indeed demand resolution to this issue.

------
executive
plan: tell government we'll crash the whole economy if you don't bail us out

~~~
tomrod
If true: that sucks

If false: the money has to be paid back, with interest. So a cash loss for the
bank.

------
sukuriant
So, in light of this news, where does FDIC come in? In a calm, yet serious
sense, the reason people in the US trust our banks is because our money is
insured by the US government. Does what has been said here have any effect on
that? --- or, does it at least have the potential for affecting that?

