No, the bank pays you interest on your deposit to entice you to deposit money there so they can lend it out. There is literally zero risk involved (other than something on the scale of the collapse of the US government, which no one is really considering here) because of the FDIC, and yet interest rates on FDIC protected assets are not 0%.
So I read the Matt Levine article on this and a couple other pieces, and I'm not getting the impression Levine or other mainstream economists think this is a good idea as it currently stands? I don't necessarily think they are suggesting its clearly bad either, but it didn't seem as positive on it as I was expecting from your comment.
Can you provide some more information, because I'm not really seeing the value in being required to interact with more financial institutions in practice.
When you deposit money in a US regulated bank, there are basically two places that can end up:
- on deposit at the Fed, in the account of a Fed member bank (which could be your bank, or a bank your bank has an account at)
- loaned out by your bank (or again, a bank your bank uses)
The Fed, so far, has refused to allow new member banks (eg that could deposit at the Fed) that don't intend to ever loan out deposits. They would take all customer deposits and stick them at the Fed. Many (most? the ones at the Fed anyway) think allowing this would siphon away money that would otherwise be used to make loans. They are, in effect, putting their finger on the scale to push you to allow your savings to be used as loans.
The rise of Private Credit, where wealthy individuals and institutions loan money to private firms for to fund loans is the new thing that could break this open. These arrangements are long term, the customer can't "call" the money back, they are committed, and (for the most part) their commitment matches the duration of the loans. So there can be no bank runs. And the people providing the money know what they are doing.
Levine is mostly arguing that with so much money in private credit, we could do without forcing small savers to fund loans.
Yes, I understand all of this. What I don't understand is why the Fed "putting their finger on the scale" (which I don't dispute they are doing, as it's part of their job) is a problem, and I still did not really pick up on Levine arguing for or against this, just saying (this is me paraphrasing, not intended to be a direct quote) "we could operate differently in theory due to all these alternative lenders that now exist in parallel with the traditional, regulated banking system, which would have some benefits and some drawbacks."
I can see some upsides (in addition to matching bank creditor and debtor duration expectations), like the implication that it would be easier in some sense to safely manage large amounts of cash because said cash is invested in T-bills instead of who knows what, but there are some obvious downsides as well concerning risk management. To quote Levine directly here, "How will the NDFIs find an extra $100 of loans to make? One obvious possibility is by making much worse loans. Another is by making fake loans."
Insurance priced for damages capped at $250k per person per bank or whatever it is. If the insurance covered unlimited damages, then this wouldn’t be a discussion.
>In response to these significant failures, the FDIC took historic action to restore faith in the banking system and protected all deposits – even those above the traditional limit. However, it is important to note that the FDIC limit did not change, nor did the standard process for protecting deposits. Instead, the extended protection offered to depositors of Signature Bank and SVB was an exception to the normal operating procedure.
I do not have a comprehensive list of every time depositors have been bailed out, but I have read about it multiple times in my adult life of the last 25 years.
>And you can't think of any way that the federal government providing retail banking services could possibly go wrong?
The federal government already controls all the banks. What could go wrong that they already do not have the power to make go wrong?
The act of maintaining a central database of funds so that individuals can transfer money to one another is a relatively simple and cheap problem, one perfectly suited to be provided by the government. It should be infrastructure, just like printing money is infrastructure under the purview of the government.
>The act of maintaining a central database of funds so that individuals can transfer money to one another is a relatively simple and cheap problem, one perfectly suited to be provided by the government. It should be infrastructure, just like printing money is infrastructure under the purview of the government.
You mean like FedNow[0], which many banks are eschewing in favor of services life Zelle[1]?
All this demonstrates is that you don't understand how the US banking system works. Bank failures != taxpayer funded bailouts.
Also, I don't know what you have been reading, but a comprehensive list of times that depositors have been bailed out by taxpayers (or anyone else, as the FDIC is not bailing out anyone by definition) would be quite short.
Lastly, there is a huge distinction between regulating banks and directly controlling access to an individual's funds. If you really can't see any theoretical problems there, I suggest you work on your creativity.
1. Continuing to maintain and improve my skills so I can earn more
2. Realizing that the rate of inflation and my achievable hourly rate (or the equivalent in salary) have little to do with each other at the personal level so your framing of the question doesn't make much sense
No one wants to work for a company in category #1, though I recognize some people might have to.
Find out their range and standard benefits package as soon as possible in the process. If you still don't know after the first phone screen/chat and are not in dire need of employment, move on. It's a great filter.
Terrible advice if you value your time or sanity, especially if you are experienced or not desperate for a job.
Find out the range up front by reading the job posting, making the recruiter tell you, asking a friend who works there, or asking after applying if you have no other connections.
No company is going to refuse to share the information because they are secretly planning to blow a qualified applicant away with a top of market offer.
I've used this as a chance to turn things back around on the recruiters. "That's a great question and I noticed you didn't mention a salary range on the posting". Allow for an uncomfortable silence as now they're either forced to give a range, or try to say something like, "it's flexible for the right candidate". The latter is my opportunity to agree, "Of course, let's concentrate on that question then, I'd sure like if we could get to the bottom of this 'right candidate' question".
No, don't let them get off the hook with "it's flexible for the right candidate", especially if you are talking to a recruiter (either internal or external).
That "flexibility" will suddenly disappear if your expectations are higher than they are looking to pay for the role, even if your expectations are completely warranted.
Android and Linux's source code is available. So its easy to find flaws and report them. Linux has live a long time and hasn't had major security issues. (Sometimes you get a compromised vendor down the chain in a single distro)
But also, imaginary tokens are really really valuable. I'm sure there are normal-ish people with ~100-1000 bitcoin, let alone a few of the outspoken people who are bitcoin billionaires.
"Valuable" is a relative term, and I am confident that the intelligence gathered using these tools is much more valuable to nations that coins that are primarily used for money laundering and other scams.
Nope, just tired of watching this list grow without end while nearly everyone else pays for the grift and people like you excuse the behavior: https://www.web3isgoinggreat.com/
You realize bitcoin is mentioned numerous times on that site, which is really just an repository of scams and people learning the hard way why the real financial industry is highly regulated, not strictly limited to the debacle that was web 3.0.
Have any NFTs you're looking to sell? They'll be super useful if hyperinflation sets in or any of the other financial catastrophes that BTC assets supposedly will protect me from actually happen.
You apparently need it, given your illogical and inaccurate statements in this thread, but I won't hold my breath while waiting for you to accept that.
Feel free to respond where you disagree for the benefit of those reading the thread.
Btw, linking to a wiki page does not reflect any knowledge on your part. By not engaging with your own words, it is fair to default to assuming that you have no idea what you’re talking about.
Others have already done so since my initial comment and your response was either "nah" or to disengage, so I'm not going to waste my time arguing with someone who is clearly personally invested in a very specific narrative.
> The fact that the US can continue to economically do so well relative to others despite currently being run by some of the stupidest and most abhorrent people possible is... sad.
It's not sad, it's strong evidence (I hesitate to call it proof, but...) that a federated model of governance with limited regulation is the most resilient and successful form of government.
All the EU states need to do is learn that regulation is not the solution to every theoretical problem any bureaucrat can imagine, and they too can experience meaningful economic growth.
I agree that if you want to pursue economic growth laissez-faire is possibly the best course of action, but economic growth isn't the only metric worth pursuing.
I have no idea where you got that idea from. If anything the EU has been focused way too much on the economy, hoping trade and economic growth will solve all problems.
1. Watching the standard of living in the US outpace the EU for decades and comparing their economic systems.
2. Basic common sense tells you that you need resources in order to fund a welfare state, a long list of positive human rights, and all the other things that the EU states want to do. Money buys resources, especially when you don't have direct access to them (which is the case for most EU states).
Probably one of these scissor statements where economic leftists think that obviously the problem is focusing way too much on [X] and the others saying the problem is focusing far too little on [X].
To some extent yes, but the issue the leftists have in this case is that X = money (or the equivalent in resources) which is absolutely required in large quantities to enact their political agenda.
You'd think so, but paying all the people who sit around and think of things to regulate, the people who actually write the regulations, the people who enact the regulations, and the people who enforce the regulations is not a trivial cost, especially at the scale that the EU wants to regulate things.
Also, the actual political agenda is based around a welfare state, which absolutely costs money to maintain.
I like infinite scrolling. Probably most users like it. My country's government banning apps from letting me infinite scroll in them sounds very paternalistic and silly.
I make apps for myself above all else. I always add infinite scrolling support to all my apps. It's just a better and smoother experience than pagination.
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