All those are terrible and the more important to fix, but the feds (Fed and feds) rushed in to the tune of trillions once it started to ravel—because the individual institutions involved were too large and tied to guaranteed deposits.
Thanks for the discussion. You are persuasive. That does not mean that I am persuaded.
This kind of brings up the topic of George W. Bush. He described himself as a “compassionate conservative.” On education, GW, tried the “No Child Left Behind” Act. Bless his heart, he tried to make socialism work with an added dose of socialism. The latest shoe to drop on that evolving story is race-based standards.
So, on to the topic at hand. The government pushes banks to make risky loans. It all blows up and the government (taxpayer) rushes in to save the banks. Cheney and others pressure (bamboozle, bushwhack) GW telling him that he must act NOW or he will be responsible for a new Great Depression. Bush then announced that the Government must act to save capitalism; the banks are too big to fail.
Bush thought it necessary that he act. William Pitt said, “Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.”
Was Bush right to act? If so, why? I’m not convinced that the banks were too big to fail. His stimulus was a mistake and just paved the way for more rounds of stimulus under Obama. I think the only valid reason for the government to save the banks was the moral reason that it was government mistakes, not bank mistakes, that messed things up. The problem was not de-regulation; the problem was the regulations that pushed banks to provide more mortgages than banks wanted to provide.
I’ve become largely immune to arguments that we need more socialism to solve the mistakes of socialism. Let’s not have more regulation to “solve” the problems created by government regulation. Let’s deregulate instead.