Comments on: Negative Externalities http://mgmtnow.com/negative-externalities/ Go-Beyond Branding Mon, 26 Jul 2010 16:30:43 +0000 hourly 1 http://wordpress.org/?v=3.0.4 By: Nick http://mgmtnow.com/negative-externalities/comment-page-1/#comment-12 Nick Wed, 26 Aug 2009 19:11:10 +0000 http://mgmtnow.com/?p=121#comment-12 I'll conceed since I don't have an accounting degree and quite honestly wasn't as interested in fiscal policies in my formative years. I definately think your perspective is solid. I too am very concerned by how we get out of this crisis. My defacto position since before Bush's second term was we needed a Jimmy Carter as our new president. We need a do nothing president to allow time for these wounds to heal. I dont see buying banks or reducing taxes as solid answers. My thought lies more in growing out of this problem, and taking a tough love approach. Was I ok with bank bailouts last year? No, because I felt if tax payers money should go into it then every single loan that was in jeopardy at the banks should be eligible for refinance at a prime + nominal amount. Instead we got JP Morgan Chase, and Wells Fargo earning billions in profits just a couple quarters after they were in "crisis". Anyways I like you pray for answers, even if I pray to a different party to find them lol. I’ll conceed since I don’t have an accounting degree and quite honestly wasn’t as interested in fiscal policies in my formative years.

I definately think your perspective is solid. I too am very concerned by how we get out of this crisis.

My defacto position since before Bush’s second term was we needed a Jimmy Carter as our new president. We need a do nothing president to allow time for these wounds to heal. I dont see buying banks or reducing taxes as solid answers.

My thought lies more in growing out of this problem, and taking a tough love approach. Was I ok with bank bailouts last year? No, because I felt if tax payers money should go into it then every single loan that was in jeopardy at the banks should be eligible for refinance at a prime + nominal amount. Instead we got JP Morgan Chase, and Wells Fargo earning billions in profits just a couple quarters after they were in “crisis”.

Anyways I like you pray for answers, even if I pray to a different party to find them lol.

]]> By: Darren Knight (DK) http://mgmtnow.com/negative-externalities/comment-page-1/#comment-10 Darren Knight (DK) Wed, 26 Aug 2009 17:51:24 +0000 http://mgmtnow.com/?p=121#comment-10 You are not going back far enough. The financial restrictions were relaxed during Clinton's second term. Some of it was even included in the Nafta legistation (again a Clinton product). These failures that caused the global financial crisis can be traced to a bi-partisan failure. Also, you cannot just focus on dividends. Let's discuss the bankruptcy rules that were changed during this time. The government put the interests of private corporations before the interests of society in general. While it was sold as a deal to make it harder for deadbeats to get out of their debts, what it actually did was remove control on these financial institutions. The financial instruments were confusing, the laws were favoring the corporations ability to make these risky investments, and the auditors were asleep at the wheel. It is a multi-faceted failure that we will be studying for years to come. There is a much bigger problem. Another crisis is looming, and not many people are willing to talk about it. We had the internet dot com bubble, followed by the mortgage crisis... but these will pale in comparison to the disaster of the credit card market failure. Insiders studying economics agree that the culture has gotten too far into debt, and banking institutions have had little accountability. While additional focus has resulted out of the mortgage issue, very little has come back to the organizational design of the credit markets. It may be five years or seven years out, but it is coming. How do you get out of it? The Democrats will buy banks and the Republicans will give you a tax break, all in hopes that you will pay off your credit card debt. With reported unemployment at 10% (and unreported figures estimated much closer to 20%) there is no way that will happen. We need fundamental change (not just Obama lip-service) from the top down. I pray that the Republicans can find something better than Sarah Palin to address this need. You are not going back far enough. The financial restrictions were relaxed during Clinton’s second term. Some of it was even included in the Nafta legistation (again a Clinton product). These failures that caused the global financial crisis can be traced to a bi-partisan failure. Also, you cannot just focus on dividends. Let’s discuss the bankruptcy rules that were changed during this time. The government put the interests of private corporations before the interests of society in general. While it was sold as a deal to make it harder for deadbeats to get out of their debts, what it actually did was remove control on these financial institutions. The financial instruments were confusing, the laws were favoring the corporations ability to make these risky investments, and the auditors were asleep at the wheel. It is a multi-faceted failure that we will be studying for years to come.

There is a much bigger problem. Another crisis is looming, and not many people are willing to talk about it. We had the internet dot com bubble, followed by the mortgage crisis… but these will pale in comparison to the disaster of the credit card market failure. Insiders studying economics agree that the culture has gotten too far into debt, and banking institutions have had little accountability. While additional focus has resulted out of the mortgage issue, very little has come back to the organizational design of the credit markets. It may be five years or seven years out, but it is coming.

How do you get out of it? The Democrats will buy banks and the Republicans will give you a tax break, all in hopes that you will pay off your credit card debt. With reported unemployment at 10% (and unreported figures estimated much closer to 20%) there is no way that will happen. We need fundamental change (not just Obama lip-service) from the top down. I pray that the Republicans can find something better than Sarah Palin to address this need.

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