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The Real Cost of the 2008 Financial Crisis

newyorker.com

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Re: The Real Cost of the 2008 Financial Crisis

#321

Post by chimeracoder »

freddie_mercury wrote: post #91
nafey wrote: post #2

But what was the alternative to the bailouts? Another depression? I feel we made it across fairly well.

This comment reads like a hot-take based solely on the subject without reading the article because you don't really engage substantively with any of the nuances the article talks about. As such, I'm not sure it really contributes as much to the discussion as if you did engage substantively with the details of the article. For example: Even if there was no alternative, that doesn't mean a clear understanding of the co…

> But taking such a non-nuanced, instrumental view I feel like you make the discussion less interesting than it could otherwise have been. And because it was a "first comment", it then warped much of the entire discussion on the topic. This thread has 80 replies and 55 of them are to you.

You are entirely correct, but unfortunately, I suspect that this is inevitable. Discussions of economic policy on Hacker News almost always end up in this same place.

Re: The Real Cost of the 2008 Financial Crisis

#322

Post by chimeracoder »

hndamien wrote: post #182
nafey wrote: post #2

But what was the alternative to the bailouts? Another depression? I feel we made it across fairly well.

Nationalisation was the alternative. Government acquires the failed banks. Manages the issue (even almost the same way the did). Profits flow back to the public. When happy, privatise again with a healthy profit. Maybe keep one as a public asset.

> Nationalisation was the alternative. Government acquires the failed banks. Manages the issue (even almost the same way the did). Profits flow back to the public. When happy, privatise again with a healthy profit. Maybe keep one as a public asset.

Are you unaware that TARP happened?

Re: The Real Cost of the 2008 Financial Crisis

#323

Post by pitaj »

394549 wrote: post #303
pitaj wrote: post #268

Earlier quoted context omitted.

Don't forget another thing the government did: previous bailouts. When large banks were told they were "too big to fail", they heard "your risks will be subsidized by taxpayers", so of course they took on more risk. We should have let the banks fail, if they really were going to. Another thing: monetary policy causing business cycles, or making them much worse. The recent money-printing by the fed is super scary to m…

> Don't forget another thing the government did: previous bailouts. When large banks were told they were "too big to fail", they heard "your risks will be subsidized by taxpayers", so of course they took on more risk. We should have let the banks fail, if they really were going to. Why couldn't the stockholders get wiped out when a TBTF bank gets bailed out? To me, that seems like a fair compromise that protects the…

You don't need to bail out banks to protect the economy.

Re: The Real Cost of the 2008 Financial Crisis

#324

Post by annabellish »

leetcrew wrote: post #220
annabellish wrote: post #69

Earlier quoted context omitted.

I really feel like this is just victim blaming. When financial advisors are telling people they can afford something because prices will always go up and will give them those loans, working out a payment plan they say that is affordable, how on _earth_ is it the fault of the people who believed financial experts on financial matters?

credentialed or not, if somebody told you you could afford something because "prices will always go up", would you believe them?

Do you have a pension? A lot of us do, and a lot of them are just specifically structured investment schemes with some tax incentives, which means they're a seventy year bet that the stock market will "always go up". Historically, that's been broadly true, given decent time scales - just as it was with house prices.

I suppose it would be logically consistent to then say that people with pensions are "asking for it", too, but you get to a certain point where we cannot blame the layman for not looking at a field where all the experts are saying the same thing and not believing them.

In financial markets, the idea that "prices will always go up" is not just reasonable, but one of the founding principles of our economy. Everything must grow, all of the time. If prices _aren't_ going up, then something is wrong, and if prices are going _down_ we call it a recession, give it a grand name with capital letters, and try to make it not happen again.

Re: The Real Cost of the 2008 Financial Crisis

#325

Post by chillacy »

moate wrote: post #317
augustus2010 wrote: post #312

I just wonder why China doesn't have a economic crisis like the EU or the US. Is their system more superior than us?

Based on different economics. Even the more socialist leaning EU nations aren't dealing with straight up Communism. China's big problem right now is actually that they brought so many people out of poverty that they're focused on controlling inflation. Also, they have a state controlled media that reports only what the state wants. Helps smooth over the rough edges with praise of their great and successful system.

China’s system is probably better characterized as “State Capitalism” than communism, since the workers don’t own the means of production.

Re: The Real Cost of the 2008 Financial Crisis

#326

Post by zjaffee »

augustus2010 wrote: post #312

I just wonder why China doesn't have a economic crisis like the EU or the US. Is their system more superior than us?

Because people there still view homes as a worthy investment, their housing bubble never collapsed even though home values are some of the least affordable in the world (even when rent is considered affordable).

Re: The Real Cost of the 2008 Financial Crisis

#327

Post by chimeracoder »

sidstling wrote: post #19

I don't think I agree with the article. Not from a European perspective. I'm Danish and we've had anti-establishment parties all my life on both the left and right side of the political spectrum. The populist rightwingers most similar to Trump and the teaparty saw their dawn in 1998 where they got elected with 7.4% of the votes. In 2001, three months after 9/11, they recived 12%. In 2005 it was 13.3%. In 2007, before…

> On facebook we have anti-vaxxer and flathearter groups, mostly using sources like infowars or breitbart because we simply don't have nonsense-media equivalents in my country. At least not yet.

I'm willing to bet that's not the case, because there absolutely are equivalents to those sites in England, Germany, France, and so forth. I doubt that Denmark is somehow particularly special.

As for anti-vaxxing, that's a philosophy that has greater traction in Europe than it does in the US. Wakefield was a British doctor, and France and Italy have lower vaccination rates than most of the US, as well as a lower percentage of people who believe that the benefits of routine vaccination outweigh the risks.

Re: The Real Cost of the 2008 Financial Crisis

#328

Post by chimeracoder »

netsharc wrote: post #66
nicktelford wrote: post #39

While a generally fascinating piece that connects together the events in the American and European financial and political systems, it shouldn't be understated how much of an effect the refugee crisis is having on European politics, which can be attributed largely to the "Arab Spring"; itself largely a consequence of the 2008 financial crisis.

I can't help but believe that if the common folk of Europe of the last, say 10 years, was doing economically better, they would have been more generous with people fleeing warzones looking for help...

> I can't help but believe that if the common folk of Europe of the last, say 10 years, was doing economically better, they would have been more generous with people fleeing warzones looking for help...

Decades to centuries of European xenophobia, Islamophobia, imperialism and hegemony provide pretty solid evidence to the contrary.

Re: The Real Cost of the 2008 Financial Crisis

#329

Post by pjmorris »

Isamu wrote: post #190
ptero wrote: post #173

Just a personal observation / data point as a lot of folks everywhere are saying "put bankers in prison" any time they recall 2008 crisis. This is from the US, no idea how things played out in other countries: Government shares a significant portion of the blame for this crisis. It required raising affordability of homes (i.e., loans) for lower income families. They might as well legislate away entropy, friction or g…

>Government shares a significant portion of the blame for this crisis. Agreed, I think the sheer size of the crisis relates back to deliberate policies to support sub-prime lending. The idea was to help people to afford homes even though they would not normally be considered a good risk. But opening this up created a vast new market, like adding a wider bottom tier to an already giant pyramid. Along with the vast siz…

This talking point has been debunked for years. It's a special favorite of Barry Ritholtz at 'The Big Picture' blog. He observes, empirically, that most sub-prime lending during the crisis was done by banks that weren't required to do so.

EDIT: To substantiate and cite, "Nearly $3 of every $4 in subprime loans made from 2004 through 2007 came from lenders who were exempt from the law (CRA)." [0]

[0] http://ritholtz.com/2009/06/most-subprime-lenders-werent-cov...

Re: The Real Cost of the 2008 Financial Crisis

#330

Post by dragonwriter »

chimeracoder wrote: post #327
sidstling wrote: post #19

I don't think I agree with the article. Not from a European perspective. I'm Danish and we've had anti-establishment parties all my life on both the left and right side of the political spectrum. The populist rightwingers most similar to Trump and the teaparty saw their dawn in 1998 where they got elected with 7.4% of the votes. In 2001, three months after 9/11, they recived 12%. In 2005 it was 13.3%. In 2007, before…

> On facebook we have anti-vaxxer and flathearter groups, mostly using sources like infowars or breitbart because we simply don't have nonsense-media equivalents in my country. At least not yet. I'm willing to bet that's not the case, because there absolutely are equivalents to those sites in England, Germany, France, and so forth. I doubt that Denmark is somehow particularly special. As for anti-vaxxing, that's a ph…

> As for anti-vaxxing, that's a philosophy that has greater traction in Europe than it does in the US. Wakefield was a British doctor, and France and Italy have lower vaccination rates than most of the US

Based on what?

Child vaccination rates (2017):

Diptheria/Tetanus/Pertusis: US 94%, Italy 94%, France 96%

Measles: France 90%,US 91%, Italy 92%

https://data.oecd.org/healthcare/child-vaccination-rates.htm

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