Building & Loan Associations
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from Stevely
I think a building society in the US is a Savings and Loan.
Precisely. These building and loan associations (later S&Ls) became popular at the start of the last century, as very local institutions.
E.g., my grandfather in 1917, among his other functions for the Winona Copper Co. (Chief Clerk for the company and Justice of the Peace for the township), was the manager of the Winona branch office of the Detroit & Northern Michigan Building & Loan Assn. The idea was small savings accounts, which then would be lent for residential housing - not unlike a credit union.
As the 1900s moved on, many S&Ls merged and eventually morphed into full-fledged commercial banks. So, by the end of the century, they added investment and insurance functions. In the era of mergers, some were absorbed by larger giants, who then used the old-fashioned S&L regulators for their own benefit. E.g., AIG was and is "regulated" as an S&L !
Nassim Taleb (Black Swans) has some ideas.
Here are his 10 ideas. You don't have to agree but he has the cred on what works and doesn't.
- What is fragile should break early while it is still small. Nothing should ever become too big to fail. Evolution in economic life helps those with the maximum amount of hidden risks – and hence the most fragile – become the biggest.
- No socialisation of losses and privatisation of gains. Whatever may need to be bailed out should be nationalised; whatever does not need a bail-out should be free, small and risk-bearing. We have managed to combine the worst of capitalism and socialism. In France in the 1980s, the socialists took over the banks. In the US in the 2000s, the banks took over the government. This is surreal.
- People who were driving a school bus blindfolded (and crashed it) should never be given a new bus. The economics establishment (universities, regulators, central bankers, government officials, various organisations staffed with economists) lost its legitimacy with the failure of the system. It is irresponsible and foolish to put our trust in the ability of such experts to get us out of this mess. Instead, find the smart people whose hands are clean.
- Do not let someone making an “incentive” bonus manage a nuclear plant – or your financial risks. Odds are he would cut every corner on safety to show “profits” while claiming to be “conservative”. Bonuses do not accommodate the hidden risks of blow-ups. It is the asymmetry of the bonus system that got us here. No incentives without disincentives: capitalism is about rewards and punishments, not just rewards.
- Counter-balance complexity with simplicity. Complexity from globalisation and highly networked economic life needs to be countered by simplicity in financial products. The complex economy is already a form of leverage: the leverage of efficiency. Such systems survive thanks to slack and redundancy; adding debt produces wild and dangerous gyrations and leaves no room for error. Capitalism cannot avoid fads and bubbles: equity bubbles (as in 2000) have proved to be mild; debt bubbles are vicious.
- Do not give children sticks of dynamite, even if they come with a warning . Complex derivatives need to be banned because nobody understands them and few are rational enough to know it. Citizens must be protected from themselves, from bankers selling them “hedging” products, and from gullible regulators who listen to economic theorists.
- Only Ponzi schemes should depend on confidence. Governments should never need to “restore confidence”. Cascading rumours are a product of complex systems. Governments cannot stop the rumours. Simply, we need to be in a position to shrug off rumours, be robust in the face of them.
- Do not give an addict more drugs if he has withdrawal pains. Using leverage to cure the problems of too much leverage is not homeopathy, it is denial. The debt crisis is not a temporary problem, it is a structural one. We need rehab.
- Citizens should not depend on financial assets or fallible “expert” advice for their retirement. Economic life should be definancialised. We should learn not to use markets as storehouses of value: they do not harbour the certainties that normal citizens require. Citizens should experience anxiety about their own businesses (which they control), not their investments (which they do not control).
- Make an omelette with the broken eggs. Finally, this crisis cannot be fixed with makeshift repairs, no more than a boat with a rotten hull can be fixed with ad-hoc patches. We need to rebuild the hull with new (stronger) materials; we will have to remake the system before it does so itself. Let us move voluntarily into Capitalism 2.0 by helping what needs to be broken break on its own, converting debt into equity, marginalising the economics and business school establishments, shutting down the “Nobel” in economics, banning leveraged buyouts, putting bankers where they belong, clawing back the bonuses of those who got us here, and teaching people to navigate a world with fewer certainties. Then we will see an economic life closer to our biological environment: smaller companies, richer ecology, no leverage.
Okay, I read all that. There's a lot of it. What he says is
don't park your common sense and don't test academic theories outside a laboratory or closed environment where there is great potential for public harm.
Most of us do that. He offers no way to insure we elect Congroids that exercise any common sense so I'm not sure he's much help.
If I can tack on, I'll note that number
fives says 'promote' -- not 'provide' -- and that liberty includes the right to be stupid. Thus, even Congress and all the Politicians get a bye... :wry:
Didn't realize there was that constraint
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Originally Posted by
jmm99
Liberty includes the right to be stupid, so long as that stupidity does not hurt anyone else...
Based on daily observation over the years, it appears more ignored than heeded by numbers of our fellow citizens and certainly by the majority of our Politicians.
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...So, "Congress and all the Politicians" do not get a free pass in all cases - nor do judges, lawyers and retired CSMs.
No one ever gets a free pass IMO -- a 'bye' OTOH, I believe, means that one gets to advance to the next or another round / attempt with outplaying or being penalized.
Thus IMO everyone, even the Lawyers, gets the proverbial three strikes... :D
Minor nit-noid correction; not a CSM, there seemed to be some silly concern over early Courts Martial -- yes, that is the plural -- that precluded my attaining that august rank. Still, I did get to do the job sans the title in two Battalions and Two Brigades, one each in both peacetime and combat. Leading me to conclude that Bde CSMs (much less those in the upper echelons) were probably not totally necessary. So just plain old vanilla SGM -- with much time in grade... ;)
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PS: I'm glad someone is citing the Constitution as our basic plan - good job.
Me too. I particularly enjoy that when it is also correctly used. Not that Slapout misused it but others sure do...
Congress, for example, does not even seem to be aware of it's existence... :mad:
P.S.
Thanks again for all your posts and particularly the legal updates. They're more appreciated than you may know.