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"When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that justifies it."

Frederic Bastiat

AND THEN WE HAVE THE BANKS

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Neal Boortz
@ October 23, 2009 8:41 AM Permalink | Comments (14) | TrackBacks (0)

The day after our special master on compensation decided to slash executive pay, the Obama administration decided that it would be a good idea to clamp down on banks while we are at it. The Federal Reserve decided to curb executive pay packages "that encouraged bankers and other executives to take the kinds of reckless risks that contributed to the housing bubble."

The housing bubble came from Washington, not from bank board rooms. It was Washington that told these banks that their future growth would be halted or curtailed if they didn't make sure that pretty much anyone with a pulse that wanted a home loan could get one. It was Washington that set up these extraordinary systems whereby banks could make the loans and then pass of the liability to the American taxpayers. It was WASHINGTON, not the banks, that took the reckless risks.

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What others are saying

  • Ayn Rand Quote
    Run for your life from any man who tells you that money is evil. That sentence is the leper's bell of an approaching looter.
    Ayn Rand
    By Groover @ 10/25/09 08:19:36 AMreport abuse
  • lane the loser meyer
    2 dollars, I want my 2 DOLLARS!
    By The Paper Boy @ 10/23/09 07:45:27 PMreport abuse
  • Actually agree with Snark Again
    I agree with Snark. This is a two-fold issue. I want to point out that I believe the government's hand, however, was heavier. The Government basically said "you will make these loans", and threatened lawsuits to those banks that would not under the guise of that great notion of "equality".
    By Matt @ 10/23/09 11:43:49 AMreport abuse
  • Would our economy have collapsed?
    We do NOT know that for sure, everything was such a rush have to do it now or the world will end hurry that no real study was done or debate encouraged on what would happen and what were the other options.

    These corporations have more than one division, some were profitable even then, they could have been sold, funds used to bolster the remaining. There WERE other options.
    By Joyce M/Blythe @ 10/23/09 11:38:44 AMreport abuse
  • Lane, Jimmy Dolan, or whoever you are...
    I've noticed over the past few weeks that your solution to everything is to punish people. For the GOVERNMENT to punish people. How did this come to be? Why do you have such hatred for your fellow man? You want the government to punish people who disagree with you. You want the government to punish people who make more money than you do. You want the government to punish successful people. You want the government to punish people who have more than you do. You want the government to punish people who work harder than you do. I tend to be suspicious that it was something about your upbringing that made you this full of hate. Did you parents abuse you? Did your father always tell you you were no good and never did anything right? What is this grudge with your fellow man? What fills your blood with such hatred? Does it really make you happy? Does it truly make you feel good to see a mob of men(and women) punish those around you? How is this rewarding to you? Have you just simply given up all hope with your life? And you want to, want someone to, drag everyone else down with you? God, I really feel sorry for you. I hope things get better Jimmy or Lane or whoever you are. Keep your head up. Good luck, my brother.
    By Big Joe Williams @ 10/23/09 11:12:45 AMreport abuse
  • Yes, the Government started it
    But then the banks claiming they had no choice is like you walking in on your wife having sex with your best friend and her saying it was all his idea.

    Yeah it may have been his idea but she didn't have to participate quite so willingly did she?

    Same with the Banks, sure they knew it was a house of cards setup by Uncle Sam, but where were the outcries from the banking industry to stop making the loans? Where did they fight back and try to hold the line?

    They never did, they simply played along and took the profits.

    Curbing executive pay packages is not the way to correct things of course, however anyone who looks at the situation can obviously see there is an inherent conflict of interest in how those pay packages currently get structured because they give a strong incentive for executives to focus on short term profits and profits arrived at through accounting tricks over long term viability and profitability.

    Do executive pay scales need to be restricted? Probably not (althought there does reach a point in the salary curve where it is very hard to justify the additional dollars because it is impossible to quantify the increased "quality or "value" of the contributions that one executive would make over another one who is cheaper) but we definitely need changes to their pay structure that forces them to focus on the long term survival of the company.
    By Rasilio @ 10/23/09 11:09:37 AMreport abuse
  • Mark - I agree on the Czars
    Mark, Agree with you 100% on the Czars. I made a similar post in another thread.

    I don't like the Gov cutting salaries but the whole Czar thing setting Policy - really scares me. If the Presidents advisors can make Policy - Why do we need Congress? They just tie things up and block the President from getting real work done.
    By Brad @ 10/23/09 11:09:22 AMreport abuse
  • They didnt put a gun to their heads
    It was obviously the Bush administration that allowed this to go on, but it isnt like they forced the banks to give the people money for loans. The banks always had their own choice. If they dont want paycuts then they can try being unemployed. hahaha
    By Lane Meyer @ 10/23/09 09:31:38 AMreport abuse
  • 10 PLATFORMS of the COMMUNIST MANIFESTO:
    (Communist goals for the Takeover of America from the Congressional Record, January 10, 1963)

    1) Abolition of private property and the application of all rent to public purpose
    2) A heavy progressive or graduated income tax
    3) Abolition of all rights of inheritance
    4) Confiscation of the property of all emigrants and rebels
    5) Centralization of credit in the hands of the State, by means of a national bank with state capital and an exclusive monopoly
    6) Centralization of the means of communication and transportation in the hands of the state
    7) Extention of factories and instruments of production owned by the State
    8) Equal liability of all to labor
    9) Combination of agriculture with manufacturing industries: gradual abolition of the distinction between town and country by a more equal distribution of the population over the country
    10) Free education for all children in government schools

    Now, point to just ONE of these that our current Congress and the obama administration are not pursuing. Just one.
    By Big Joe Williams @ 10/23/09 09:13:34 AMreport abuse
  • Risk - Reward
    I agree the housing bubble was started by the government. However the escalation of the problem and the real crisis was created by excessive risk taken by the banking and investment institutions. The risk versus the reward was skewed way too far in favor of the institutions. I disagree with the solution involving pay but institutions need to face a more realistic risk reward scenario.
    By Jim Wright @ 10/23/09 08:57:47 AMreport abuse
  • Rofl
    It was the Federal Reserve that created the bubble with the help of dirtier than usual politicians and their offshore bankers. This unholy alliance is what has brought our dollar to its knees and it will be what ultimately causes the fall of our republic. This was planned all along by a small group of global elites. It was coordinated as a sophisticated terror attack on the American people and our sovereignty. I am still trying to figure out why people believe ANYTHING these scum tell us.
    By Ivan @ 10/23/09 08:54:56 AMreport abuse
  • Big Bad Banks
    As long as Joe and Jane 12-pack remain ignorant enough, the politicians will continue to demonize the financial industries; and before we know it, voila! Nationalized banks, with the government having direct access to YOUR checking account (if by some miracle there's anything left in it after the next 3 years).
    By Randy @ 10/23/09 08:52:20 AMreport abuse
  • oh c'mon
    they both played roles in this collapse but, without govt stepping in with funds these banks would have collapsed along with our economy.

    washington turned a blind eye to the risks these banks were taking because no one, and I mean NO ONE thought they would get snagged when this house of cards fell. They all knew it was just that but, it's like vegas. They were betting and held too long and we're all paying for it now.

    but to JUST blame our govt is ridiculous. it really shows how little you understand about how this happened.
    By snarkybird @ 10/23/09 08:51:15 AMreport abuse
  • Anyone?
    Anyone, including Neal, want to tell me where this Czar has authority to cut a persons pay? He is NOT the head of any department; he is an ADVISOR to the president. This is really the scary part: that these Czars have control over decision making, and NO ONE is questioning it.
    By Mark @ 10/23/09 08:49:56 AMreport abuse
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