Reply With Quote
lol, krugman
What A Real External Bank Bailout Looks Like
Something I’ve been looking at: Texas after the savings and loan crisis of the 1980s.
The cleanup from that crisis cost taxpayers about $125 billion (pdf), back when that was real money. As best I can tell, around 60 percent of the losses were in Texas (pdf). So that’s around $75 billion in aid — not loans, outright transfer.
Texas GDP was about $300 billion in 1987. So this was equivalent to giving — not lending, not even taking an equity stake — Spain 25 percent of its GDP to bail out its banks.
And in the US it wasn’t even treated as an interstate political issue.
Update: Not incidentally, Texas had a nasty special recession in the late 1980s, even as unemployment was falling nationally, partly driven by falling oil prices, but also driven by the collapse of the S&L bubble.
I think you can make a strong case that if Texas had been an independent country in 1986-87 it would have experienced a huge financial and fiscal crisis.
http://krugman.blogs.nytimes.com/201...ut-looks-like/
TX and other Fed-financed redstates is just like the 1%, HATES the Feds, except when the Feds are shipping them $Bs.
lol, krugman
Darrin always is so devastating with his counter-arguments and refuting facts.
lol krugman. Answering questions nobody's asking.
lol no mention of the Windfall Profits Tax eating Texas oil production alive.
lol no mention of the Garn-St. Germain Depository Ins utions Act which enabled the crash.
lol boutons the blue team fluffer.
Newsflash. Texas aint a nation. Any metaphor predicated on that nonsense fails.
TX and other Fed-financed redstates is just like the 1%, HATES the Feds, except when the Feds are shipping them $Bs.
lol simpleton.
Also, there were quite a few jail sentences handed out at the end of that fiasco.
Except it wasn't because the S&L losses occured over several years and Krugman is only using one year of Texas' GDP. He's not comparing apples to apples.
He had no intention of doing so. Shocking.
Not.
boutons, always so absent when confronted with facts.
To be fair, the collection from that tax from all states over the 10 years it lasted was only $80 billion...
Texas, Louisiana and Oklahoma, the major "energy states" back then simply suffered a real-estate price collapse because the price of oil tanked.
The tax is almost invisible compared to the consequences.
Where do you think alot of those S&L's were leveraging capital?
Real Estate.
The real estate / oil collapse started well before the S&L's blew up, yet Krugman's writing seems to suggest that it was the S&L scandal that was the primary cause for the Texas recession.
I lived that collapse. I know people who were wiped out by it. I personally know two bankers that served time because of it. Krugman doesn't know jack about it. He could. He's a bright boy.
For whatever reason, he chooses not to.
We lived it too. My dad was in the O&G business. Tough times.
Hence the LTD.
I agree they over-leveraged on the real estate market, but the actual problem was S&L's not being regulated like banks, and acting like them.
The windfall profits tax had little to do with that situation though... Texas was hit with both the S&L fiasco and the prices of oil tanking, which produced a fairly deep recession in the state.
They needed a bailout and it was granted to them. If this was California being bailed out today, you'll never hear the end of it from the resident red team...
Hence the LTD.
Yep. Used to be Dad's company car that he "cut me a deal on".
did you read the article at all, or just going by boutons?
What stands out to me is this phrase:
"And in the US it wasn’t even treated as an interstate political issue."
How times have changed...
Read the article and checked out the links. That's how I found out Krugman's statement about the S&L bailout being 25% of Texas' GDP was BS.did you read the article at all, or just going by boutons?
Hence my reference to the Garn-St. Germain Depository Ins utions Act.
The windfall profits tax had alot to do with destabilization of oil prices.
I've read that the majority of the bailout money went to out of state holders.
Wasn't the bailout actually handed out in the 90's, when Bush Sr was already president?
Depends upon which component of the bailout you are looking at. The FSLIC portion was active in both decades.
Yes. And the Texas oil bust pre-dates that.
Agree on this.
Disagree on this. Going by the numbers alone, the tax collection was about 1% or less of the state total GDP during those years. Furthermore, the tax was simply not collected after 1986, since oil price went below the base price.
IIRC, what happened then was the discovery of new oil deposits at sea, which moved a lot of the production out of state and thus fired up the unemployment rate in Texas, couple with OPEC finally stopping to have a dominant position on the oil markets.
Wouldn't doubt it. But it was a state aid nonetheless.
I'll take both of your words for it. I gotta get some work done
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
