Quote (ofthevoid @ Apr 15 2020 01:02pm)
Commercial banks make money primarily by lending. In a crisis like this when most businesses are shut down and are not generating any revenue, the can't service their debt obligations, meaning they can't pay the banks. Also other financial business lines like underwriting, mergers & acquisitions, etc, also slow down significantly during economic downturns. Long term some of these names are terrific buys, short term they'll continue to struggle to get revenue when companies aren't generating money.
I get really annoyed by your camp when people criticize government for bailing out companies that are in trouble like the airlines or whatever. If you don't help, they can't meet debt obligations and they go bankrupt, if they go bankrupt, many people lose their jobs and have to rely on taxpayers, as more of these companies fail, there is more centralization of business, which is anti-competitive which leads to more pricing power by the sellers.
Paying people's student loans doesn't create jobs, bailing out a bank that has tens of thousands of mortgages on their books does. If we didn't bail lenders out for example, instead of enjoying a 4% mortgage you would be looking at something double that. So what happens is most poor people would be priced out of ever buying a house. If you are paying 8% on your mortgage your disposable income is severely cut so you aren't buying the latest iPhone, taking the family to Florida, etc. Like there is no great capitalist conspiracy against poor people, this is the way the system works and it's lifted all boats for decades.
Paying student loans will create jobs because consumption creates jobs.
I was for auto bailouts, not bank bailouts, but it was probably necessary.
Nine senators voted against the GLBA 1999 because it would create financial entities "too big to fail". Was a prophecy.
If you don't think the highest earners of the youngest workers in society being completely burdened by debt then you are out of touch.
The American worker has lost 90% of its power purchasing parity since the 1960s.... That plus debt makes it very hard to save even.
This post was edited by Skinned on Apr 15 2020 11:17am