Posted on 10/27/2008 2:33:04 AM PDT by The Raven
About a year ago Stephen Moore, Peter Tanous and I set about writing a book about our vision for the future entitled "The End of Prosperity." Little did we know then how appropriate its release would be earlier this month.
Financial panics, if left alone, rarely cause much damage to the real economy, output, employment or production. Asset values fall sharply and wipe out those who borrowed and lent too much, thereby redistributing wealth from the foolish to the prudent. This process is the topic of Nassim Nicholas Taleb's book "Fooled by Randomness."
David GothardWhen markets are free, asset values are supposed to go up and down, and competition opens up opportunities for profits and losses. Profits and stock appreciation are not rights, but rewards for insight mixed with a willingness to take risk. People who buy homes and the banks who give them mortgages are no different, in principle, than investors in the stock market, commodity speculators or shop owners. Good decisions should be rewarded and bad decisions should be punished. The market does just that with its profits and losses.
...
There are many more examples, but none hold a candle to what's happening right now. Twenty-five years down the line, what this administration and Congress have done will be viewed in much the same light as what Herbert Hoover did in the years 1929 through 1932. Whenever people make decisions when they are panicked, the consequences are rarely pretty. We are now witnessing the end of prosperity.
(Excerpt) Read more at online.wsj.com ...
There's the rub. Calling mortgages and subprimes free is like calling the health industry free.
The Great Depression was caused by government interference and so is this one. The Democrats have no qualms about using this crisis to their advantage even though they're at fault.
“The Democrats have no qualms about using this crisis to their advantage even though they’re at fault.”
I hope to understand someday just what happened with the Republicans on this one?
They had this one run up a tree — all they had to do was aim and shoot!
A gimme and they seemed to ignore the opportunity.
Yep, and McCain’s hand in the $700B and promise to buy up bad mortgages aren’t very pretty either. The scary part is still how much worse Obama would be as a capper to it all!
>>Yep, and McCain’s hand in the $700B and promise to buy up bad mortgages aren’t very pretty either.
The folks against the 700 billion seem to think there would be a few failures and that would be that. The Dems successfully made that seem as folly but they voted for it.
So they do stupid things without real consequence to themselves at everyone else’s expense.
A hell of a way to run a country.
Best game plan in Washington is to don’t do something just set there until blood is on the floor then act like you tried to make matters better.
Look how close our brave House Republicans came to asserting sanity, however. They were proposing a helpful something rather than a counterproductive something. And if McCain and Bush had backed them, we might have pulled back some of the Paulson insanity.
But you’re right, it’s politically much easier to jump in there and make things much worse!
Well, duh. If we can rise above the quadrennial, bi-partisan sponsored soap opera long enough to see the simple truth,...
The Media’s Latest Failure — Globalization and the Credit Crisis
http://www.americaneconomicalert.org/View_art.asp?Prod_ID=3060
Part of what Laffer is pointing out is there are good (fair) failures—and then there’s really messing up the whole system. I don’t think the House Republicans were denying the former, they were trying to stave off the latter.
Clinton injected steriods into Carter’s CRA. Combine that with Credit Default Swaps, “financial weapons of mass destruction”, his ‘rat socialist enablers/co-conspirators the $pare change redistributor/community organizer comrade Obama...you get the Marxist version of check$ and balance$.
Republican greed. Contractors, Real Estate Developers, remember even fat Dennis ‘Coach’ Hasteret was in on a land deal.
RINOism. Bush’s ‘Ownership Society’, which favored by government action getting people into homes.
Republicans did nothing but cover their asses. They expended little political nor public effort. Every year, a handful of Republicans said something, but push to shove, in the legislative world, they did squat.
Sorry, but that’s a fact.
We did have a baseball steroid investigation, so we have that going for us, which is nice.
Anyways, Bush and Congress are now wallowing around like a bear in the economy, and now Washington will be ‘fixing’ things for the next ten years.
And people wonder why the market is going crazy? Because you have crazy people, stupid people, who are not using their money, who are using force on other people and their money.
I was answering about why these rackets had significant support, which they did, in the GOP.
I wonder if the title is really correct. What I mean is, maybe this is actually reality staring us in the face.
We were living in a world of $1,800 handbags, fer cryin out loud.
I think prosperity will always be there, is a sense. Maybe it means being one of the first in line to get in when the Goodwill store opens in the morning.
Myself, personally, I hate waste of any type. For instance my next door neighbors recently moved out. They left a bunch of those blankets the moving companies use. Now, they were a bit dirty, but they were almost brand new, out of the box. So I ran them through a couple wash cycles and man, they turned out great! Into the cedar chest!
I spent a large part of the day today taking two almost identical lawnmowers in not great shape and merging them into one mower that is in very good shape!
That sort of thing.
We can still be prosperous. It amounts to knowing the difference between “What I want” and “What I need”.
Talk about $1,800 handbags . . .
Yes, my how the world has changed.
I remarked upon this a few days ago while driving through a very expensive neighborhood that is nearly oceanfront.
For some reason, it didn’t look as nice to me as it usually did. After giving it some thought I realized it was nothing about the neighborhood, but rather that my outlook had changed a bit. I was looking at those expensive homes and, instead of seeing a pleasant place to live, I was seeing onerous upside-down mortgages and no buyers for these homes for a long time should the owners wish to sell.
IOW, it had stopped looking like prosperity to me.
Good point.
What worries me is not my own preparation, I am quite prepared for any disruptions in the supply chain, etc.
What worries me is for every person like you or I who have done some planning and preparation, there are literally a hundred, maybe more, out there who haven’t.
And try as I might to be a hard-azz like some around here, I AIN’T gonna shoot a ten year old kid who knocks on my door and asks me if he/she can have a bowl of soup.
This is just a rerun of the Roosevelt years. Anger was high, because rationale people knew government wasn’t the answer. But they couldn’t trump the Fireside Chats.
They had the opportunity 8 years ago when we actually had the majority. We accomplished a lot during the newt years but there were so many things we wanted to accomplish if only Clinton wasn’t in the way. And when we got our own guy in, did we abolish HHS, energy, Labor and education? No, the govt just got even bigger!
So now that the dems have the majority, we lost our chance with the bailout, especially since it was Bush who came up with the idea. That’s the consequence of missing the opportunity given years ago.
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