Question:
Some people still don't see the wrongdoing of the banks' involvement in the 2008 crash? Why is that?
cannonball
2012-05-13 22:45:09 UTC
Do they not understand the entire history of the subject? Do they not understand economics? I don't understand why people defend the big banks after they crashed the economy with their derivatives scams? I also don't understand why bankers did not go to prison for their wrongdoing. And I know some people will say, "What the banks did was legal." And you're right. With the help of crooked politicians (both Democrat and Republican), Glass-Stegall was repealed. The banks and their lobbyists then created and exploited loopholes and sold bundled together sub prime loans (backed by a AAA credit rating) throughout the world. Even the bankers didn't understand the derivatives. But does this make what they did right? Should there be some form of justice? As the bankers who crashed the market in 2008 with their derivatives scams see record profits after they got bailed out while poor and middle class Americans are hit with austerity measures, do you feel there should be some form of justice?
Three answers:
anonymous
2012-05-13 23:26:05 UTC
It's a bit late now to want justice. Deals are done, money has changed hands (often vast amounts, and from public to private hands), and the bubble has come and gone. The status quo is set and there is really very little that can be done about it. It's not so much that the banks are too big to fail, it's that the system is too big to fail. I don't think half the people working in finance actually understands it, and more than half probably don't understand (and therefore don't follow) the regulations, or interpret it to suit their own needs. We let it happen.



The only ones who felt the effects of this slow and often subtle squeeze are those at the bottom of the barrel, but only now do we realise that we were too complacent. I think people want to believe that it will all go away, that as long as they work hard and earn their keep, it won't be them on the streets shouting about pensions being cut to a quarter. People characterise those who march as 'lazy', as those that chose not to work, probably to cash in on this opportunity for social superiority. Humans are petty like that. We always like to think there are those who are worse than us, worse off and worse for it because they are worse people. We like to forget that these people could have easily been us had the domino fell another way.



People still believe in the system, especially those who survived the paranoia of the Cold War. It seems odd to a lot of us now that people would hold on to the establishment and system that hoodwinked them and their fellow man, then passed off the debt onto us, but it's a deep seated need to protect capitalism. What is laughable of course is that those we're trying to defend it against (communists) are practicing it better than we preach (look at China's market strength).



Protecting capitalism and the system we worked for means protecting the investment and futures that these people have worked for. The system is working still for some, and the majority are happy with the minor exploitation they suffer around the middle, it's hard to give up on that for something unknown and untested, and at worst might bring your own happy bubble bursting around you. We all know the banks were at fault, but we like to blame the people who interacted with them. Banks have to be safe, or our money isn't safe. Banks can't fail, or our pensions, our nest eggs, our trustfunds and retirement funds will disappear into smoke. The magic trick works because people want to believe. Punishing the banks, letting them fail, that just can't happen. Those with more savings will be more scared and squeal louder, this won't change.
Wake Up
2012-05-13 23:00:14 UTC
Glass-Stegall was repealed by a Republican majority congress.



Yes there should be some form of justice, and some financial reform and more banking regulations to stop them from packaging up and trading mortgage securities and other loans they know is worth basically nothing, like Lehman Brothers did.
anonymous
2017-01-09 16:47:00 UTC
What everybody is you speaking approximately? i do no longer understand a single soul who does no longer see (who did no longer see on the time) the duplicity and foolishness of the banks. Why do you think of the Democrats have been so quickly in bailing them out? Who controls B of A ultimate now? Why is B of A doing Obama's bidding? What fools have you ever been speaking to, college economists?


This content was originally posted on Y! Answers, a Q&A website that shut down in 2021.
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