The Cyprus “deposit haircut” « Hot Air
That type of confiscation couldn't possibly happen in the U.S.!
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Because I am old and have this irrational interest in politics, there's a lot of crap I have seen and heard and way back in my day, I think it was 1984, in a speech at, IIRC, the Dem convention, Jesse Jackson spoke of the need to fix the inner cities. Nothing new there. He spoke of the problem, no money to do it. Nothing new there. No banks willing to loan, no news there.
Then, he said about $1 trillion was needed to do it, an, at the time, eye and ear catching number. Then, he threw it out there; that there was about 1 trillion in private savings not doing anything and that we ought to just take that money and use it to do it.
Then, he reasoned it out. We are gonna spend the money (that amount) indirectly anyway on welfare and so forth. What if we were to use it to FIX the problem, create the economic conditions in the cities that would then provide the jobs and the commerce to eliminate the need for welfare, arguing out that the basic economy of the inner cities, food, clothing, goods and services, was plenty large enough for these communities to become self sustaining if only we could get them over the hump, so to speak, and just build the necessary infrastructure, the shops and so forth and let 'er rip.
Now, I will tell you, obviously, things aren't that simple and he didn't discuss, even for a second, what happens to all the business's now supplying those goods and services but, there was a symmetry and logic to it from THEIR, inner city folks, view point; we are spending enough money to build local economies, heal the inner cities, why shouldn't OUR money stay home?
So, it was stunning, just confiscate people's savings. It was thought out and, assuming it all magically worked, which isn't how it works, it can't, BUT, again, from their viewpoint, the system being rigged, banks not wanting to loan because of the white man rules, because of lack of collateral, lack of power to make changes that would necessary TO collateralize loans, the catch 22 of 'the system' and 'the man'.
Now, I will say I remember people laughing about his naivete, his shear lack of a single clue of how and why a given company, a plumber, carpenter, utilities, insurance, how all that hum drum, boring stuff works, the micro, but, again, he was directly addressing the problem; you complain about welfare, loan us the money to get out of this vicious cycle YOU control, and we won't have need of your money anymore, the macro. But, all in all, it was, at the time, unthinkable.
Then, along comes TARP. And we do the unthinkable. We bail out people who HAVE money. We pull the chestnuts out of the fire of the people who run the catch-22 who effed up. We used other people's money to fix a problem.
And, of course, TARP didn't fix anything. It made things worse. Far worse. And the biggest joke of it all; at least Jesse's plan made SOME sense.
Think about that for a few minutes.