US Federal Agency to sue big banks over mortgage securities

@USAF: Except that they big and influential enough that they can, and have been, ignoring current regulation. Giving them more regulations to ignore isn't going to change anything.

So prosecute them. "Regulation" implies consequences for ignoring them. Said consequences shouldn't include nationalization, however.

@USAF: And what consequences should there be for ignoring regulations? You can't fine them, because that'd get taken right out of their client's pockets. You can't break them up, because people need large cross-state banking.

Where do you think the money comes from when we fine every other business? It's not like they would just go "oh, well, I guess we're going to have to take the hit." They pass it on to the consumer. That's how everybody makes money. By getting it from a consumer.

The hit to PR would probably be sufficient in and of itself, too...

What the fuck threadsplosion! I turn my head away and BAM!

Anyway USAF, you're taking anti-nationalization as an axiom, so it's kind of impossible to argue with you.

edited 2nd Sep '11 4:11:27 PM by TheyCallMeTomu

Well, I wouldn't be opposed to temporary nationalization in extreme instances. But the US is supposed to be founded on the ideal of freedom. The freedom, say, to found any kind of institution of commerce you want so long as it doesn't prey on others. Regulation prevents the latter, and nationalization precludes the former.

It's not as if all banks are evil. Vocal Minority is in full effect here. Unfortunately, the Vocal Minority is made up of mostly large banks, but that doesn't mean they can't be regulated into submission...

@USAF, that freedom has led to situations like this and situations where the common American has to bend over and take it.

I ask you, is that what the Founding fathers want?

Where are you getting this notion that the US was founded on the ideas of freedom as it pertains to economic freedom? The only reason there wasn't more government involvement in economics was because the economies of scale and conceptualization of things like Socialism and Communism hadn't even really been invented yet. We weren't founded to get rid of economic crap-we were founded because we didn't wanna pay taxes to some guy in Europe. Or something.

I'll grant that US History is not my strong suit, but it seems like a bit of a stretch to suggest nationalization is somehow unamerican and anti-freedom.

Tomu, America was founded because Britain decided it could dick around with us, preclude us from our rights as British citizens (at that point) and basically do whatever. The Founding Fathers wanted a society that was free in every way possible.

Regulation exists to prevent people from getting shafted while still letting them have the freedom to found and run businesses in an ethical, safe manner. Nationalization tells us that only the government is fit to run the economy. I believe this is wrong...

You have a very limited view of the founding fathers, USAF. Some were libertarian, some were authoritarian, some were conservative and religious, some were liberal and atheistic... the same mix you find today. Characterizing them as "pro freedom" is a gross simplification.

The existence of nationalized banks does not preclude the existence of privatized banks.

Of course they didn't all agree on how to get to this product. However, I can't judge what their intentions were. I can only go by what they left us in the Constitution. And the Constitution is designed to maximize the rights of the people and minimize government impact on their lives—both from the Federal Government and from the States.

Bad precedent is bad. First it's "they're too big to fail, so we'll take them over for awhile" (GM) to "they're naughty so they're ours for awhile" (the big banks) to "we don't like this whole system, let's take over everything."

Incremental change towards bad things is still bad...

edited 2nd Sep '11 4:33:34 PM by USAF713

@USAF, dicking around is wrong. Asking the Colonials to share the burden of defending their own homes is more accurate. However, thats off topic.

Soft touch regulation is bullshit as stuff like this happens.

Asking us to pay our fair share is perfectly ok. Expecting us to pay taxes and then not letting us vote for representation in the government that levies the taxes is not.

Why does me saying "regulation, not nationalization" make me evil? I want them to be ethical. I'm fine with significant regulation. Nationalization is not appropriate, however.

edited 2nd Sep '11 4:36:47 PM by USAF713

The Constitution is designed to balance the powers between the various branches of Federal government and between the government and the states. Limited in this case means "not unrestricted", not "as small as possible".

Anyway, can we get off this Founding Fathers derail and back to the topic?

edited 2nd Sep '11 4:36:15 PM by Fighteer

Again USAF, that's a non-argument. Or a Slipper Slope Fallacy. It doesn't really attest to the value of temporary nationalization as a solution or not. It just says "It's like something else I don't like, so let's say no."

The Constitution tells us we have a right to property, if I am not mistaken. Exclusively speaking, the US Government cannot legally nationalize anything.

One problem is that, in the US, the civil courts only work for the wealthy or for those lawyers are willing to place a bet on (i.e. contingency fees) — those likely to get a fat payoff that the lawyer can profit from. If you're of modest means, the amount of money in question is small as far as a lawyer's concerned, and your opponent is significantly richer than you, you effectively have no recourse in the courts, because your opponent can make fighting them more expensive than you can afford and can drag things on until you have to give up.

Another problem is that, increasingly, both political parties in the US and most elected politicians on the national and state levels are beholden to the financial industry. This means that fixing what's wrong is increasingly impossible, and also means that politicians have an inflated idea of (a) how important the financial sector is, and (b) how important it SHOULD be. Increasingly, society is being run as if the money middlemen are the most important part of it, even though they are neither the producers nor the consumers.

Another problem is that, with the wholesale shift in retirement and other savings toward securities in the last 30 years, there's been a constant pressure for more things to invest in, and for a high rate of return even if it exceeds the actual ability of the nation to give it.

There's also laws for Eminent Domain, USAF. The government just has to compensate private entities fairly in order to utilize said eminent domain. And if a bank is failing, then a fair price for said entity is, well, virtually nothing.

Again: The government owning something does not prevent others from owning things. There is such a thing as public property.

edited 2nd Sep '11 5:00:11 PM by TheyCallMeTomu

Who says Eminent Domain is a good thing? Just because you're getting money doesn't mean the government has any right to make you move for no other reason than because it wants your land for itself.

It's a precedent, Tomu. If the price for breaking any regulation for a business is nationalization, eventually everything will be nationalized. It's not a good idea, I don't like it, and I question the Constitutionality of it.

Again, that's a non-argument. It's basically arguing from personal incredulity.

Right now the topic of this thread is suing the banks, not nationalizing them. How much coverage is this story getting?

I haven't heard it on MSNBC which usually jumps all over this crap. On the other hand, last night was a Special Show, so...

I only watch Maddow.

edited 2nd Sep '11 5:20:40 PM by TheyCallMeTomu

Constitutionality is a good argument. The US Government operates on the Constitution as a basis. If that's not a good argument, nothing about the US Government is valid.

But no argument is put forwards as to why it's unconstitutional.

In any event: we're off topic. The thread is about suing the banks, not about nationalizing them.