Please cite specific examples of common deceptive practices (not just anomolies) if you're claiming that Wall Street fully practices deception on a daily basis. To claim that they do so is just absurd. Taking a populist opinion without understanding specifically how the banking industry works, and what it can and can't legally do, just wreaks of the Dunning-Kruger effect.
It's simply impossible that you've been following the politics/economics/finance for any longer than a week and you haven't heard of stuff like Dual-Track or Robosigning or document fraud (especially allonges).
Well, if you cite specific examples about what you're referring to that's from a factual and objective source (since there could be thousands of different viewpoints), I would know your premise. Simply calling a whole industry as engaging in deceptive practices as a common occurence -- and freely accepted among those in the industry -- is unfair, absolutely untrue, and does nothing to help the financial system become more effective for society at large.
I didn't call out the whole industry as engaging in deceptive practices as a common occurrence. I do however think there is some deception occurring and that if it isn't uncovered and corrected, it will grow.
You did however did claim that any hint of deception would destroy their business and that therefore deception is not happening.
I think your claim is absurd and does nothing to help the financial system become more effective for society at large.
In all fairness, those of you downvoting the parent need to address the following:
The FDIC receives no Congressional appropriations – it is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities.
I remember there being some talk about FDIC potentially needing to borrow from the Treasury during the financial crisis however as far as I know, it didn't happen.
That's a bit like the way Fannie and Freddie received no direct appropriations... before they collapsed. They had an implicit guarantee, which was worth just as much as cash, and wound up costing a lot.
When people trust the FDIC, it's not based on the idea that they're an independent entity charging sufficient premiums to handle any eventuality. They're not; they predict they will be below their legally-required reserve level through 2017 and not hit their target reserve level until 2027 (with rosy economic assumptions):
Not so far, but if we ever let more than one of the TBTF banks go, then the FDIC will be taking out billions in loans at sub-market interest from the taxpayer.
The overwhelming cause for the Great Depression was tight monetary policy, and trying to let the market "sort it out" without providing any stimulus (e.g., QEs). When you have a highly illiquid economy with no spending or consumption, you get no growth; that factor prolonged the Depression. That conclusion is supported by economists across the aisle, from Paul Krugman to Milton Friedman, to everyone else in between -- including all living Nobel Laureates in Economics. That premise is the Fed's main justification for the recent QEs.
The government did not try to let the market sort it out. That is simply revisionist history.
Please go read up on the New Deal as well as the Hoover administration (Hoover doubled the budget deficit in an attempt to spur recovery, resulting in FDR calling him a Socialist during the election campaign).
That's absolutely untrue and intellectually dishonest. The Feds, as indicated by Friedman and Krugman, were tight with the money supply. Because money wasn't flowing, the economy wasn't running. Please go and read the causes for The Great Depression on any economist's website (or even Wikipedia).
I didn't dispute that the feds were tight with the money supply. I disputed the claim they tried to let the market sort it out. They didn't.
Among other things (since you want to take a 100% Keynesian view), the government created sticky nominal wages and prices (with minimum wages and price floors). Hey, remember why Keynesian economics claims we need to print money?
This is getting a little absurd. First, I'm specifically referring to the Feds in its tight control of the money supply during the Depression. They restricted the money supply. If you have another term for what the Feds did (note the difference between the Feds and the federal government), then so be it.
Loose monetary policy during a drought is not just supported by Keynesians (who really emphasize more expansionary fiscal policy), and is definitely not a 100% Keynesian view. Monetarists, for instance, support it widely. As do other economists. Friedman supported it, as does Bernanke, Greenspan, Summers, Mankiw, et al. To claim that an expansionary monetary policy is 100% Keynesian is just absurd and distorts the positions of other economists.
Let me repeat: I didn't dispute the existence of tight monetary policy. I disputed that the federal government tried to let the market sort it out. Also, when you said "Feds", I assumed you meant people in the Federal Government (including the Federal Reserve, but not limited to it). Typically the Federal Reserve is simply shortened to "the Fed".
Lastly, if you read your own link (to the Wikipedia article on causes of the GD), you'll discover that there are many proposed explanations (including, for example, protectionism).
Never mentioned is the fact that the government had a fixed exchange rate for gold, yet was inflating the dollar from 1914 on. By 1929, the dollar had nearly halved in value, yet there was the same exchange rate for gold. What this essentially means is you could double your money by exchanging cash for bullion.
This precipitated a run on exchanging dollars for gold, a run that continued to collapse banks until FDR suspended exchanging dollars for gold.
