Re: Re: Re: Re: technology and legal systems
CB: If you are looking for faux socialism ( state monopoly capitalism) look at how the U.S. government, the Federal Reserve Bank, bailed out that giant hedge fund when it failed. Or Chrysler , before it was Daimler. How much money did the U.S. government commit to Long Term Capital Management? How much money did the U.S. government lose in its investment in Chrysler? none and none. But didn't the Fed implicitly guarantee the loans that the private banks made to LTCM? No. They took equity positions...
Re: Re: Re: Re: Re: Re: technology and legal systems
At 07:57 PM 05/15/2000 -0700, you wrote: CB: If you are looking for faux socialism ( state monopoly capitalism) look at how the U.S. government, the Federal Reserve Bank, bailed out that giant hedge fund when it failed. Or Chrysler , before it was Daimler. How much money did the U.S. government commit to Long Term Capital Management? How much money did the U.S. government lose in its investment in Chrysler? none and none. But didn't the Fed implicitly guarantee the loans that the private banks made to LTCM? No. They took equity positions... so didn't the Fed implicitly promise to support these equity positions that the banks took? Jim Devine [EMAIL PROTECTED] http://liberalarts.lmu.edu/~JDevine How do you support an equity position?
Re: Re: Re: Re: Re: Re: Re: technology and legal systems
At 07:47 AM 05/16/2000 -0700, you wrote: At 07:57 PM 05/15/2000 -0700, you wrote: CB: If you are looking for faux socialism ( state monopoly capitalism) look at how the U.S. government, the Federal Reserve Bank, bailed out that giant hedge fund when it failed. Or Chrysler , before it was Daimler. How much money did the U.S. government commit to Long Term Capital Management? How much money did the U.S. government lose in its investment in Chrysler? none and none. But didn't the Fed implicitly guarantee the loans that the private banks made to LTCM? No. They took equity positions... so didn't the Fed implicitly promise to support these equity positions that the banks took? How do you support an equity position? For example, you give below-market loans to help the owners when if they get in trouble. Precedents can be seen in the US Savings Loan crisis, where even officially the FSLIC (which later became part of the FDIC) was supposed to help only the depositors through deposit insurance, the owners of the thrifts were also helped. Just having one's depositors' deposits guaranteed helps the owners of the thrifts' equity, since it allowed a low-cost source of funds. More importantly, regulatory forbearance -- the informal loosening of regulations -- did so too, since it allowed the owners of ailing thrifts to shift assets out before the deluge. The exemption of all but the worst SL crooks from prosecution helped, too. (Was the Bush involved with this George W's brother?) Jim Devine [EMAIL PROTECTED] http://liberalarts.lmu.edu/~JDevine
Re: Re: Re: technology and legal systems
CB: If you are looking for faux socialism ( state monopoly capitalism) look at how the U.S. government, the Federal Reserve Bank, bailed out that giant hedge fund when it failed. Or Chrysler , before it was Daimler. How much money did the U.S. government commit to Long Term Capital Management? How much money did the U.S. government lose in its investment in Chrysler? none and none. But didn't the Fed implicitly guarantee the loans that the private banks made to LTCM? After all, the Fed brought the bankers together to save LTCM. (This kind of guarantee isn't free, since if it's done too much, the Fed would lose its vaunted credibility. Further, it might conflict with anti-inflationary goals.) The US government didn't lose anything on Chrysler, but didn't the latter get a good deal when they sold off tank division (so that they could pay back the bail-out early)? (Please correct me if my memory is faulty on the details.) More importantly, if the Fed or the government is going to act as a lender of last resort to organizations that are "too big to fail," that's a major benefit to the latter organizations, even though it doesn't show up on their balance sheets or bottom lines. The Fed and the government wouldn't act that way toward me, toward the big chunk of the income distribution that's below me, or to the many small businesses that fail every day. The Fed and the government are acting in response to the hefty clout that the "too big to fail" organizations have, one that allows them to survive and grow, encouraging the concentration and centralization of wealth and power. Jim Devine [EMAIL PROTECTED] http://liberalarts.lmu.edu/~JDevine
Re: Re: Re: technology and legal systems
Jim Devine [EMAIL PROTECTED] 05/15/00 04:16PM CB: If you are looking for faux socialism ( state monopoly capitalism) look at how the U.S. government, the Federal Reserve Bank, bailed out that giant hedge fund when it failed. Or Chrysler , before it was Daimler. How much money did the U.S. government commit to Long Term Capital Management? How much money did the U.S. government lose in its investment in Chrysler? none and none. But didn't the Fed implicitly guarantee the loans that the private banks made to LTCM? After all, the Fed brought the bankers together to save LTCM. (This kind of guarantee isn't free, since if it's done too much, the Fed would lose its vaunted credibility. Further, it might conflict with anti-inflationary goals.) _ CB: Why didn't LTCM and Chrysler just get the bailout without any government involvement ? Afterall, the government is so inefficient and messes everything up. Why can't all businesses who are in trouble ( or maybe LTCM and Chrysler were only faking being in trouble) get bailed out by someone, the government, private banks, whomever ? _ The US government didn't lose anything on Chrysler, but didn't the latter get a good deal when they sold off tank division (so that they could pay back the bail-out early)? (Please correct me if my memory is faulty on the details.) More importantly, if the Fed or the government is going to act as a lender of last resort to organizations that are "too big to fail," that's a major benefit to the latter organizations, even though it doesn't show up on their balance sheets or bottom lines. The Fed and the government wouldn't act that way toward me, toward the big chunk of the income distribution that's below me, or to the many small businesses that fail every day. The Fed and the government are acting in response to the hefty clout that the "too big to fail" organizations have, one that allows them to survive and grow, encouraging the concentration and centralization of wealth and power.
