The Happy Hospitalist - Latest Comments in http://thehappyhospitalist.blogspot.com/2009/02/primary-care-is-tarp-bank.html

Re: http://thehappyhospitalist.blogspot.com/2009/02/primary-care-is-tarp-bank.html

Anonymous — Sun, 08 Feb 2009 19:26:00 -0000

HH:
Again I think you need to do a little reading on this subject. The average recessions from 1900-2000 are around 13 months in duration. The Great Depression was 40+ months in duration before FDR was in office. The depths of the depression (as evidenced by national output) was in 1930-1932 under Hoover's tutelage, in which his policies mimiced what you proposed. Look, I don't want the scumbags who got us into the mess to get TARP money anymore than you do. I also don't think the inducing the second great depression is the answer either.

Re: http://thehappyhospitalist.blogspot.com/2009/02/primary-care-is-tarp-bank.html

Anonymous — Sun, 08 Feb 2009 15:37:00 -0000

To throw water on that argument is the simple fact that FDR did not take office until early 1933. Almost 3.5 years after the stock market collapse. Hoover's policies were in force until 1933. You can't blame someone if he wasn't even in office yet.

Re: http://thehappyhospitalist.blogspot.com/2009/02/primary-care-is-tarp-bank.html

Anonymous — Sun, 08 Feb 2009 00:03:00 -0000

HH:
I think you really need to sit down and read the history of the Great Depression. The fact is Herbert Hoover made borrowing much more difficult at the exact time it was needed. The general consensus is it worsened (or pushed the US into it) the Depression. Remember FDR and his public works projects. I am not saying money wasn't wasted then. But, the opening of the public works projects gave a jump start to the economy (yes so did WWII but by far the worst of the depression was over by then). I must say much of our national park infrastructure, Tenn valley works, Hoover Dam are from that era. Your proposal is essentially what Hoover did. We know how that ended. You also fail to understand that ALL of the five major investment houses are either directly or indirectly (through being bought out) have TARP funds. Just where are these must have execs gong to go? The answer is nowhere. you also should read up on the Glass-Steagall act and how it was gutted by Phil Graham et alin the 1990's. To be fair and apolitical this was on slick willie's watch. Ole Phil needs to retire somewhere and not do any more damage to this country than he already has done with his screwed up policies.

Re: http://thehappyhospitalist.blogspot.com/2009/02/primary-care-is-tarp-bank.html

Anonymous — Sat, 07 Feb 2009 16:18:00 -0000

The simple fallacy of your argument happy is there are jobs floating around out there just waiting for these guys to jump to. There aren't. Hundreds of thousands of wall street/executive jobs have evaporated. Haven't you been reading the papers? When these companies accepted TARP (our money), they accepted the strings. Frankly, some of the bonuses right before the New Year to these guys was outlandish (ie. google Merril Lynch bonuses). This is not permenant. As an analogy happy, would you expect a big bonus if you saw half the patients compared to the year previously (these guys lost 1/2 the value in the market?). No of course not. In typical situations I would agree with your statement of letting the bad apples fail. The problem is that in this case, the bad apples are huge and plentiful such that we could (or would depending on who is talking) be driven into a depression. As bad as things are now, an umemployment rate of 7.6% is much different than 25% in the early 1930's. One of the big things we need to make sure is that this does not happen again. That there is a level of responsibility (ie. throw people in jail for lending money to those who don't qualify etc). We also need to reinstitute depression era laws such as the Glass-Steagall act of 1933 which kept investment houses separate from banks. Morons like Phil Graham are responsible for these important laws getting overturned because it "can't happen now" (guess what it did). The perpetual oversight laxity of the early 2000's administration with respect to these issues has to end. This is not new. Does anybody remember Enron?

Re: http://thehappyhospitalist.blogspot.com/2009/02/primary-care-is-tarp-bank.html

RoseAG — Sat, 07 Feb 2009 13:14:00 -0000

With the banking market the way it is it'll take awhile before negative effects of this turn up.

For now they need to quit with the mega-salaries because it's pissing everyone else off.

Re: http://thehappyhospitalist.blogspot.com/2009/02/primary-care-is-tarp-bank.html

Anonymous — Fri, 06 Feb 2009 14:27:00 -0000

If you're Bill Gates or Warren Buffett, what difference does that next $1 million make, after you already have much, much more than so many others? $500K is chump change to a lot of those Wall St jokers.

The best and brightest are needed to lead in many areas other than banking. Why are the Big 3 auto execs still around, saying "woe 'R' us"? Why throw TARP money at a private equity firm from which shares cannot be purchased (i.e.Cerberus Private Equity, majority owner of Chrysler and GMAC, formerly GM's financing arm - also with a large business in residential mortgages/HELOCs).

Then there's the MNB... *sigh* So much to do, so few qualified people to do it...

Re: http://thehappyhospitalist.blogspot.com/2009/02/primary-care-is-tarp-bank.html

Keith Sarpolis — Fri, 06 Feb 2009 14:00:00 -0000

Happy,

I would look at it another way; maybe we need to force all these bankers with their immense talent to go work in other sectors of the economy. Maybe Wall Street has been attracting all the talent and that is detrimental to other areas of the economy like manufactuing.

From my perspective, how do you judge when someone is talented anyways? These guys couldn't see a train wreck coming or figure out they were lending money to people that had no income or assets. I would tend to tag someone as brilliant who could see this approaching disaster and guide his/her bank on a safe course; not these idiots that became blinded by the money and made short sighted and dumb decisions. There has to be some downside for these jokers, just as there are big upsides when they succeed. Of course the guys at GE who want to have the same rules would be for allowing bonuses, especially GE capital may be begging for some capital soon itself.

Finally in which universe is 500 grand a year not enough money?

Re: http://thehappyhospitalist.blogspot.com/2009/02/primary-care-is-tarp-bank.html

kris — Fri, 06 Feb 2009 13:43:00 -0000

they respond to financial incentives but not necessarily in the right way. finacial incentives does not ergo mean increased productivity and improved bottom lines. also when you have just borrowed a gazillion dollards from me for mismamagement and down right greed, the general electric ceo's remark is either hilarious or so out of touch with reality it borders on bizarre. the good old boys days are over...once you violate trust(just like a little kid) you have to earn it back. No car for you, ceos, till we see those grades improved and your room clean. and iF executives leave in droves who cares? Did you listen to the whistleblower testify to congress about the sec's absolute disregard for madoff since 2000. wellheeled and compensated foxes watching the hen house. Bonuses and incentives have just bred a white collaramorality.

Re: http://thehappyhospitalist.blogspot.com/2009/02/primary-care-is-tarp-bank.html

kris — Fri, 06 Feb 2009 11:04:00 -0000

i agee with above... my understanding is it is temporary adn there are eventual rewards...are you telling me financial incentive is the only reason that drives the best and brightest? You have just diregarded the great number of incredibly talented people who just love what they do..not all the comps and benefits. airlines are chopping pilots' pay right and left but you have captain sully...case in point

Re: http://thehappyhospitalist.blogspot.com/2009/02/primary-care-is-tarp-bank.html

Anonymous — Fri, 06 Feb 2009 08:51:00 -0000

the proposal doesn't permanently cap their salary, just until the loan is repaid. and the executives can receive options for the future, ensuring long term alignment of interests.

i don't get the outrage. if i borrow an exceptional amount of money, there are certainly terms attached to it. there are certainly talented individuals willing to work for 500k/year and the potential to have millions in options. if the outraged can find someone willing to pay them more, god bless them and good luck.

if the stronger banks drive the weaker banks (with value priced leadership) out of business, that's fine too. i don't think we are going to continue to see such mega consolidation after citi and after bank of america. there is probably a sweet spot beyond which further growth limits your ability to manage disparate interests and divisions well.

obviously ymmv