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Strategic behavior: "It's a good life"

Submitted by lambert on Mon, 09/29/2008 - 6:24pm

When your typical insane child doesn't get what they want NOW NOW NOW, I understand that one typical response is a temper tantrum. (In this case, we're dealing with a temper tantrum from the Twilight Zone's Peaksville, but still.) So, expect more pain character building as the banks attempt to torture a trillion dollars out of us. Ian Welsh explains:

The problem was that banks aren't lending to each other. This isn't because they fear that other banks won't repay if they fail, in every case when a bank has failed, the Fed has made sure that banks with outstanding interbank loans got their money back. So this isn't a question of systemic risk causing fear.

Instead the fact of the matter is that banks can make more money lending elsewhere and, more importantly, by causing the system to seize up they were making it likely that they'd get a huge, oh 700 billion to 1.5 trillion dollar bailout. Whatever you can get for lending overnight to other banks kind of pales in comparison.

Now that this bill has failed, the real risk is that banks will pile on the pressure. Since just not lending to each other has not been sufficient, the next step is to severely tighten credit to consumers and businesses. They will claim that this is because they just can't afford to lend.

Double super Vegas-style "All you can eat buffet!" bonus pony bingo!

Je repete:

If somebody was going to give you a trillion dollars if you caused somebody else a little pain, what would you do?

Well, I know what you'd do, but we're talking bankers and Our Betters in the ruling class here.

If Obama had any stones, he'd call these guys out. But no: The problem is partisan bickering. "It's a good life...." [pounds head on desk]

NOTE See also Michael Moore, under "gun to their heads". Gee, it sure would be a shame if something happened...

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Submitted by jawbone on

makes them "too big to fail." And, maybe, too big for even the US government to control?

This has looked to me, based on reading the outlier economists (those pesky ones who called this situation correctly-you know, the ones who now must be ignored?) that the Big Banker Boiz are going into the protection racket.

Nice little economny you have here, too bad if something happens to it. There goes your nice seat in Congress...

Gun to the head? Prized horse's head in the bed? Provide your favorite example of mob tactics.

BDBlue's picture
Submitted by BDBlue on

Hank Paulson as Mexican General Jesus Guiterrez Rebollo.

For those who don't remember he was Mexico's first (and, IIRC, last) drug czar.* He was lauded by the U.S. for his tough tactics against the Tijuana cartel only to have it discovered he was doing it because he was working for one of their competitors. He wasn't enforcing the law so much as using it to take out the competition. Good times.

* Czar may be the stupidest nickname ever for any government official not actually a czar.

dr sardonicus's picture
Submitted by dr sardonicus on

This isn't about bad mortgages. And it's not Congress they're holding hostage, it's the American people, specifically the millions of baby boomers getting set to retire.

What they are holding hostage is the vast sum of money the baby boomers have put away for retirement. Their threat is that if they don't get their golden parachutes, they are going to tank the economy and flush all that money down the drain. Either Wall Street gets what it wants, or the boomers will eat cat food in their senior years. That's the bottom line.

I'm beginning to think Thomas Jefferson was right about central banking, and that's scary.

...for the rest of us