Posted on 09/25/2009 7:28:51 PM PDT by Kaslin
A year after the financial bubble burst, recovery still struggles against the political meddling that caused the recession in the first place.
But the G-20 meeting of government leaders in Pittsburgh offers more of the contradictory promises made in April, offering bailouts and subsidies while condemning protectionism.
We would all be better off if the Western economic powers had simply let the recession work itself out.
The financial crisis was not caused by bankers. Bankers have been doing their business for centuries.
They did not simply get together and agree that suddenly they would take huge risks and get really greedy and really careless with other people's money. They made spectacular mistakes, but we must look for the source of those mistakes.
Nor was the crisis caused by world financial imbalances.
Yes, America was a massive buyer and China was a massive seller. With those dollars, the Chinese government has bought lots of American securities and other investments. But it's not asking for its money back. That imbalance did not suddenly explode into a financial crisis.
No, the root of the crisis was back in the Great Depression of the 1930s when U.S. authorities made loans more widely available to stimulate housing. In the 1970s, President Carter intervened to help poor minorities onto the housing ladder.
President Clinton strengthened this, and the banks feared regulatory reprisals if they did not make more loans to people who were poor credit risks, even those unemployed and living off welfare.
(Excerpt) Read more at investors.com ...
Bump for later read. Sounds by reading just the excerpt that it’s a good article. Be back later.
Yo’ linky is hinky.
Absolutely Amen!
Mr. Market is never wrong. All this stimulus money did was make the inevitable take a little longer.
Too big to fail? Pshaw! Let 'em go. We'll all be much better off in the long run.
“The financial crisis was not caused by bankers. Bankers have been doing their business for centuries. They did not simply get together and agree that suddenly they would take huge risks and get really greedy and really careless with other people’s money. They made spectacular mistakes, but we must look for the source of those mistakes.”
Here comes the Wall Street spin. Don’t regulate us. We didn’t cause this mess. Wasn’t none of our fault. Naw, we didn’t figure out ways to package bad loans as AAA paper. Nope wasn’t us. It was the gummint.
parsy, who hopes no one falls for this spin
We’re dealing with moral hazard. Institutions that are protected were told what to do and told that they can also do it....so like the saps people are, they decide to buy into it and go with the mob.
You have government pushing it, you have big banks pushing it and you have the public pushing it....anyone that didn’t see this coming must have been partially blind!?
People did see it coming:
parsy, who hopes you enjoy it
So, Parsy, what do you think of Sotomayor’s proposal that it was a mistake to give corporations the legal status “person?”
Will that fix us up?
http://www.outsidethebeltway.com/archives/sotomayor_overturn_corporate_personhood/
I don’t know enough about it to comment. I think there may be some good come out of it if it restricts the right of free speech for corporations. This could have an impact on advertising which I think has helped lead us down a path of destruction. OTOH, it could stifle business and have bad impacts.
oarsy, who needs to study this more
You had to be an industry insider to know how bad some of those loans really were. Many of us layman concluded there was an over priced housing market, but we didn't know the depth of the fraud and malfeasance.
“Today’s Crisis Is Rooted In 1930s Policies”
It sure is!
“The bourgeoisie will have to be put to sleep. So we shall begin by launching the most spectacular peace movement on record...The capitalist countries, stupid and decadent, will rejoice to cooperate in their own destruction. They will leap at another chance to be friends.
- Dimitri Manuilski, Prof. at the Lenin School of Political Warfare in Moscow, 1930]”
- from yesterday’s post “The Perestroika Deception” I hope everybody read that or bookmarked it. It’s a key to the present political meltdown.
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