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View Diary: Tough Choice: If DOJ Prosecutes Wall Street, Banks Could Collapse (196 comments)

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  •  They're investors (51+ / 0-)

    They'd take their losses on money center banks like everybody else.  The stock market would tank temporarily, but would rebound again in relatively short order as the banking sector resorted itself out.

    Finance has been far too large a segment of the economy for many years now, and the economy has suffered for it.  The "giant vampire squid" moniker should refer to the bloated financial sector, sucking the life out of the productive economy.  If a crash shrank it down to proper useful size again, so it acted as a lubricant for the real economy instead of a plantation owner, it'd be a very good thing for everybody in the not-so-long run.

    Citizens United defeated by citizens, united.

    by Dallasdoc on Wed Feb 06, 2013 at 04:41:07 PM PST

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    •  Agree (32+ / 0-)

      Those at the Fed & elsewhere who thought we could shift our economy from a diverse one with manufacturing, agriculture, transportation, etc.  to a financial services and tourism based economy were wrong.  

      We're too big to pretend we can turn our economy into Switzerland West.  We knew it then, we know it even more now.

      The whole idea of a full global economy was also a mistake, particularly when we try to become economically dependent on nations that have no credible government and are controlled by criminals.

      Democratic Leaders must be very clear they stand with the working class of our country. Democrats must hold the line in demanding that deficit reduction is done fairly -- not on the backs of the elderly, the sick, children and the poor.

      by Betty Pinson on Wed Feb 06, 2013 at 05:13:48 PM PST

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      •  Right there, Betty! (3+ / 0-)
        Recommended by:
        Ray Pensador, YucatanMan, MichaelNY

        I don't see you here often enough - must follow!


        The Fail will continue until actual torches and pitchforks are set in motion. -

        by No one gets out alive on Wed Feb 06, 2013 at 06:25:53 PM PST

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      •  don't forget wage-competition with (11+ / 0-)

        slave- and practically-slave-labor.

        Markos! Not only are the Gates Not Crashed, they've fallen on us. Actual Representatives are what we urgently need, because we have almost none.

        by Jim P on Wed Feb 06, 2013 at 07:14:50 PM PST

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      •  Yup...but changes? (5+ / 0-)
        we could shift our economy from a diverse one with manufacturing, agriculture, transportation, etc.
        Agree. This last year a few companies announced plans to "onshore" manufacturing--very limited, yes, but it's a start. Apple and others are firing up new, modern factories to mfg some of their products. It's not enough, but I'm looking at these companies as "early adopters" in a returning wave.

        Every company knows the difficulties of manufacturing in China and other off-shore labor pools. Several of the Tech companies I've worked for contracted manufacturing in China or Taiwan, and it's a struggle to get it right, according to the signed contract, and then keep it that way--with top quality. But the cost...

        Now new manufacturing automation, technology, and processes have reduced or even eliminated the advantage of cheap labor. The advances coming out of our universities--manufacturing engineering--are accelerating and getting to market much quicker.

        Will this happen in any major way? That's where politics comes in: if we, as a country, make it painful to build products offshore, we will see more domestic manufacturing. I'm not holding my breath, but this is yet one more reason to take the House back in 2014.

        The challenges of large-scale agriculture are different...and the same. There are changes afoot, but again, it'll take significant changes in how we reward our ag companies for sustainable and efficient management. But that's another comment...or, if I ever get the time, a diary.

        •  Here's one simple example from your mention (13+ / 0-)

          of difficulties meeting standards:

          I wear Levis jeans. (sorry if that stamps me as hopelessly old-fashioned in the world of Lucky, Seven for ripping off humanity, and the rest. Ok, occasionally a pair of Gap jeans, but not often).

          So, all my old Levis jeans were made in the USA.   I went out and bought a pair of new jeans about a year ago and found out they weren't made in the US any more. Honduras, I think.  Well, they were OK, but they wore out rather quickly (and weren't any cheaper).

          So, I went to get another pair or two.  I picked out the same size and tried them on.  They were wayyy too tight.  I picked out the next size larger and they were about right.  Then I picked another color and that size was too large, so back to "the usual" size and it was OK, but that pair was 2" longer in the leg for the same measurement.

          WTF?  So, I asked the sales clerk about all this.   "Yes," he said, "the mfr reps have told us to expect up to 1" to 1.5" variation in the waist and a maximum of 2" variation in the leg to the stated size.  We're supposed to recommend that all our customers try on their Levis and not just buy the usual size."

          Why would that be?  "Since they've moved production overseas, rejection rates are way too high if they hold the makers to the size standards, so they allow greater variation to keep the rejects numbers down."

          Good grief.  And this is what the Levis mfr rep told the store.  Do you think it might be worse than that?  I do, having tried them all on.

          So, make it overseas, allow the products to be wildly "off" and sell them anyway.  I'd pay another $20 a pair to have them made in the USA with decent, lasting denim, and to the right size in the first place.

          But Levis doesn't give me that choice (yes, they do have "Made in the USA" "special" jeans, for something like $150 which is an insane price).  They'd rather just not have a decent name or reliable quality any more.  And the fit is nothing like it used to be, meaning consistent shape in the various parts.  

          This outsourcing business is hell on everything from beginning to end.  And not the least on the poor slave-labor condition workers overseas.

          "The law is meant to be my servant and not my master, still less my torturer and my murderer." -- James Baldwin. July 11, 1966.

          by YucatanMan on Wed Feb 06, 2013 at 11:20:26 PM PST

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    •  that's rather heartless (0+ / 0-)
      •  All the more reason to expand Social Security (7+ / 0-)

        Otherwise, do you propose the government backstop more losses with taxpayer money?

        Government and laws are the agreement we all make to secure everyone's freedom.

        by Simplify on Wed Feb 06, 2013 at 10:24:20 PM PST

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        •  i'm all for expanding SS (0+ / 0-)

          but until we do saying 'ah screw them' is heartless and while I do so with clenched teeth if the choice is break the economy and charge the bankers or do nothing don't break the economy I choose the second

          •  The thing about gambling is - sometimes you lose. (1+ / 0-)
            Recommended by:

            I'm sorry that people allowed their greed to be exploited and decided to gamble on private gain instead of investing in their countries future.

            "I have often seen people uncivil by too much civility, and tiresome in their courtesy." Michel de Montaigne

            by JesseCW on Thu Feb 07, 2013 at 05:36:08 AM PST

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          •  You don't have to (2+ / 0-)
            Recommended by:
            Ray Pensador, Dallasdoc

            break the economy.  An orderly transition could be managed, similarly to when countries left the Gold Standard during the 1930's.  The important thing is that the transition has to be carefully planned inside the government and kept absolutely secret from the banking criminals during that planning, so that they don't instantaneously move all of the money offshore (unless you go with a full "old dollar to new dollar" substitution).  Usually you have to institute (horror of horrors to the financial world) CAPITAL CONTROLS for the first day to month so that, again, the criminals can't hide their money offshore.  You can, however, simply nationalize the failed banks as a penalty for malfeasance, fire all the executives above the operational level without severance pay, and then keep ordinary operations continuing under the supervision of government managers for however long is necessary while you sort it out.

            There are plenty of ways to do this, if the government is not 1) bought or 2) too AFRAID to act.  There is no reason why nationalization, for instance, should have any more effect on the "Main Street" economy than if the bank was bought out by one of its corporate rivals.

            •  I'm not a fincial person (0+ / 0-)

              so I can't speak to the feasiblity of this but do you really think in this day and age secercy could be kept? or for that matter given the current attitude towards 'socialism' (quotes because it's not really socialism) that there would be the political will for this?

              •  As you said (0+ / 0-)

                the lack of "political will" falls directly under my points 1 & 2 above.  Technically, there are many ways to solve the problem.  They will not be used, because there is no "political will" to buck Wall Street.

      •  Of course it is -- it's capitalism (1+ / 0-)
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        Investing in the stock market is capitalism, which is inherently heartless.  What else did you expect?

        Citizens United defeated by citizens, united.

        by Dallasdoc on Thu Feb 07, 2013 at 05:35:44 AM PST

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        •  nice semantics you should do debate (0+ / 0-)
          •  Semantics? (2+ / 0-)

            Investing in the stock market is capitalism incarnate.  Why the hell would you expect it would be anything but heartless?  Making investors whole for losses in dodgy investments -- which big banks are very clearly -- is a preposterous idea.  There are so many more deserving candidates for government help.

            Citizens United defeated by citizens, united.

            by Dallasdoc on Thu Feb 07, 2013 at 05:59:49 AM PST

            [ Parent ]

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