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No one asks how they're going to pay for it either. No debate. No hesitation.
Housing? Student debt? Helathcare? Nope nope nope can't pay for it. But this shit, arming nazis, adding more bazinga bases - MUST DO NOW! Damned joke of a country.
These are loans though, not tax-funded programs. They’re presumably going to be paid back (albeit probably at a generously low interest rate - that’s a separate discussion) so “hOw aRe yoU gOiNg to PAy fOr it?” doesn’t apply the same way.
I have no faith that these won't just be forgiven like the round of loans during early covid.
The PPP loans given to business came from Congress I think. A ton of those got forgiven while of course student debt did not
This seems like a place to note that the maximum Social Security payment for a person on disability (SSI) is $10,970.44 a year. Your benefits are reduced if you get a discount on rent or if someone helps you buy food.
To paraphrase Anthony Bourdain on Henry Kissinger, once you've been on SSI you'll never stop wanting to beat every capitalist to death with your bare hands.
SSI played a huge part in pushing me towards communism. I worked in a social services role and saw how godawful it was for the people I worked with. It's so damn dehumanizing.
The people who were dropping the "not a bailout" stuff were tripping me up, because I've heard neolibs say the same thing about 2008 because "oh well they had to pay back some loans", and it makes me wonder if there's actually some official definition for the term "bailout" or if it's more of a vibe check.
I guess I don’t care what pedantry explains how it’s not a bailout. What I care about is how the feds and banks moved heaven and earth to make wealthy people whole over a weekend while hoi polloi are left to fend for ourselves forever
“omg did you try to withdraw over $250k? Don’t worry sir, we’ll do everything in our power to make sure you have the funds you need”
vs
“You tried to withdraw $40 but you only had $30 in your account? Fuck you”
When they overdraft, it's an apology. When I overdraft, I get a fee that costs twice as much as what I had in the account before I overdrafted.
When I was a teenager, I had a savings account that got overdrawn due to fees for not meeting the minimum balance. Then they just started piling on fees after that until it was further in the negative than it had ever been in the positive over the life of the account.
Ooof. I'm sorry. That's fucking rough.
Being charged for being broke and then ending up in a loop of fees. And on a kid no less.
That's the wild thing, it was a small-town S&L. You fucking expect it when you go in with Chase or Wells Fargo or Citi or something, but these guys were local vampires.
For my money a bailout is when somebody outside a system comes in and prevents it collapsing, and bailouts themselves are value neutral. For example, in 2008 the government could have bailed out the mortgage industry by just paying people's mortgages and giving them the deeds, which would have been a good bailout, but they instead gave the money to the banks and millions got foreclosed on, a bad bailout.
This particular one is pretty bad in context. The government's over here squeezing workers with the interest rate rise, meanwhile for the wealthy the money tap truly hasn't been turned off.
The fed: god inflation is so bad ugh we need to reduce the amount of money in circulation
The banks: 👉👈🥺 I need $300 billion and sloppy toppy literally right now
The fed: omg yes right away :stuff: wow queen ur basis points are so huge
Interest rate increases where supposed to hurt workers and get them back to work.
Instead it harmed the rich. So good turn that printer back on
Remember the people on this leftist website who were saying this wasn’t a bailout because that’s what the fed press release said
No, I remember people correctly saying it wasn't a bailout because a bailout entails bailing out shareholders, which didn't happen for any of the failed banks.
The new program of swapping securities to other banks that didn't fail is a bailout, though.
@mkultrawide is correct though. The point they're trying to make is that the FDIC thing isn't a bailout, which is probably why they led with it so that people will jump the gun and call it a bailout when it isn't since billions in bank equity and debt are getting wiped out. The securities swap is a bailout however (its basically backdoor quantitative easing), which came later, and is more technical and less talked about. It undercuts your position to not understand these technical nuances because it makes you look misinformed when you make statements that are factually wrong, even if they might be sound rhetorically. This is how technocrats argue and you're falling into their trap by not understanding these specifics.
I'm not trying to shout at or own anyone here. I'm going to go back and amend some of my posts. I'm mad about all of this. I just want y'all to understand the nuances here because our finance system is complicated as fuck and it doesn't help us if we dont understand it and understand how to communicate what is going on effectively.
I mean I think it's fair to cover the nuances, but saying it's not a bailout when it effectively does the same thing and has the same effects on the rest of us just seems like a bit of pedantry.
So saying "it's not technically a bailout but here why that doesn't really matter" probably would've gotten a less harsh response than glibly posting the same shit that they were in neolib circles
It doesn't do the same thing. If it did the same thing as a bailout, you would be able to go out and buy SVB stock right now. You can't, because the bank is gone and the equity is worthless. SVB Bridge Bank, which published that fucking ridiculous "we are now the safest place to put your money" bullshit is not the same bank. It's an FDIC-adminstered bank that will operate until they can find a buyer or wind down operations.
Whether or not insuring the full value of deposits constitutes a bailout is a different question that I don't have a good answer for, but SVB's depositors are not the same thing as their shareholders, although I am sure there are more than a few idiots who were both.
Effectively doing the same thing in the sense of its effects on the economy and the rest of us.
Whether or not I can buy stocks of SVB wasn't exactly the main concern being brought up
Please explain how you believe that the effects on the economy of letting SVB fail and go inter receivership are the same as bailing it out and letting it continue as a going concern.
Norway is a socialist country because of social safety nets. Fuck the nuances.
Here's my "fed posting", since you are so interested.
Yes understanding and regurgitating fed double speak will for sure give us a upper hand in over throwing the system.
You gotta meet people where they're at and that requires understanding their definition and working around it to make your point clear, otherwise you're just talking past each other. I'm not saying you have to concede their definition explicitly, its probably best to ignore what doesn't make your point crystal clear, and by lumping the FDIC and securities swap together you're just making your whole argument easier to attack.
there's a meme about how liberals and fascists don't need to understand anything, they can just say "duh, the thing is bad/good because it's a bad/good thing" and communists have to be experts in history, philosophy, geopolitics, war, law, science and economics.
it sucks but its true.
if youre gonna be able to provide a counterpoint to "itll all be fine, we'll save the hardworking job creators at the wework but for funcopops factory by using the totally normal dif, backstopped by the fed with a little securities swap in the middle" you actually have to understand and engage with those ideas.
They seem very similar worldviews? Wouldn't the capitalist losses refer to shareholders?
Though the depositors are also capitalists, their risky behavior was keeping money in a bank
Amending my comment in the spirit of not trying to get into a slap fight with other leftists. My apologies. See my responses below for my explanation of thoughts. I also have screenshotted what I originally commented, in case anyone wishes to see it.
Amending my comment in the spirit of not trying to get into a slap fight with other leftists. My apologies. See my responses below for my explanation of thoughts. I also have screenshotted what I originally commented, in case anyone wishes to see it.
$45B wasn't conjured out of thin air to cover deposits. It came from the ~$100B Deposit Insurance Fund administered by the FDIC.
This new program of swapping long term securities with low interest rates with ones at higher rates is a different story. That's coming out of thin air.
This new program of swapping long term securities with low interest rates with ones at higher rates is a different story. That’s coming out of thin air.
If you still have any patience for this conversation, what do you mean by this? Are you talking about the expanded discount window, or is there something in addition to it that developed after the BTFP was set in place through the something or other systemic exception?
Nah dude, it's ineffectual cus it refuses to engage with material reality and clings to 19th/20th century understandings of the world as gospel.
Sure, the only way Marx was able to be as insightful as he was, was because he totally immersed himself in all the economic data and theory available to him at the time. Things that could easily be called insignificant pedantic arguments, following your argument. If we refuse to do the same and just stick our heads in the sand about these things, then we have no hope of changing the society we live in.
And about the old understandings part. While many things in Marx are still relevant, they are at best incomplete. He also incorporated other ideas from the sciences of his time which many Marxists have categorically refused to do since Marxism became a primarily academic project, at least in the west. Now to be fair, this has been changing, especially since 2008. But most people stick to old theory which, while it can still be insightful, is not up to the task of bringing about revolution as it currently stands.
the depositors are capitalists. they took on risk in exchange for lower rates on loans. the government has bailed them out. when people say they bailed the bank out they mean the only surviving entity that was once the bank - the depositor base.
So if your bank fails and you lose your money, are you also a capitalist if you chose a bank that offers higher interest rates?
what? it's a commercial bank. they're literally capitalists - they're the owners of the SV startups that are slowly going bust this cycle.
Does anyone know more about the discount window? That's the part the seems like free money, and was also not what was being discussed previously
The problem with the discount window is it signals to everyone that you're having financial problems which means it'll be even harder for you to get liquidity at competitive rates from the market once its known you're getting help from the fed. So it tends to be underutilized, however with financial stress already being so high it's probably the least bad option for some institutions which is why its seeing so much use currently.
I was one of the ones saying this wasn't a bailout. I still kinda think it's not a bailout, at least the first part, the FDIC stuff. Maybe it's just semantics, maybe I'm not clear on the definition of a bailout, but my understanding is that a bailout is when you help out the bank owners, and this was helping out the people with money in the bank (who are likely a bunch of bourg scum who don't deserve "their" money back but that's an entirely different matter). Is that whack?
This is of course all within the capitalist framework, but is putting money in a bank account really ever considered a risk or an investment? That makes sense for investment accounts and stuff but as far as I'm aware these were just normal bank accounts
I guess that tracks, but it feels weird to call something a "risk" when there is no upside (0% interest) and only a downside
I follow. Thanks for walking me through it.
As a wise man once said, "The kind Vladimir Ilyich would have shot everybody here".
Isn't that part of what happened with FTX or am I getting my financial entities in crisis mixed up?
"Lent" is the operative word that means it's not a bailout. Under TARP, the government bought the garbage assets from the banks above market value which made them solvent. The situation with the CDOs was also much worse in 2008 than the current treasury problem.
The federal reserve isn't buying the treasuries outright, but it is accepting them as collateral at par value, which means that it is allowing banks to borrow more than they normally could, but it only repairs the bank books in the sense that they may not need to record the current market value of the treasuries they own. If withdrawals happen too fast, they'll be selling treasuries en masse to no one and further drive treasuries down in a spiral that will drive more banks under. 10 year treasury yields have gone down, which may be because banks aren't selling them and are borrowing from the fed instead.
I think this only extends the runway a bit so I think we'll get to real bailouts eventually, or the federal reserve will push yields down again and that will fix the books. Because the banks have treasuries that pay 1.3% and they're being allowed to borrow more at 4.5%, which will only make them more insolvent over time if nothing else fills the gap. But it's possible that this is enough because the bonds will return to par value over time and interest rates might go down again which both means the market value of the bonds will go up, and banks will have more time to lend mortgages at higher rates, making banks solvent again. But people don't want to borrow at these rates either.
It's not 0% interest. They need to pay more than the treasury collateral generates.
People here irritate me sometimes. Go 1 week without fighting for no reason.
