Posted on 12/06/2008 8:13:03 AM PST by Brilliant
Damn good, Brilliant.
And another “Brilliant” statement. :-)
Thanks for sharing your thoughts.
Of course we had recessions back when private parties and the states could issue money.
I'm envisioning a recession about 6,283 BC, in fact, where the reindeer herds swung East rather than South during the winter, and boy was that a recession.
Yes but, with the help of miscalulating managers of our financial institutions.
Very well thought out and well written. I couldn’t agree more. Like you I think this economic crisis is going to bring more government into things, not less because people have been sold a bill of goods that government can actually fix things.
Brilliant...too bad we’re the only ones who will see this, and understand the cause of it all...unless the Ghost of Recessions Past pays a late night visit to the producers of ABCNBCCBSCNNMSNBC
This argument that the recession is proof that laissez-faire economics doesn’t work is the most inane thing I’ve ever heard. It might have some plausibility if we actually had laissez-faire economics in this country, but we’ve got the biggest most intrusive government in the history of the nation. If the Big Government liberals can’t make things work now, then Big Government just doesn’t work.
But a system that is even partially based on free market principles will not take such abuse indefinitely. Eventually, the market-oriented elements of the system revolt and refuse to swallow more of the crap generated by the political system. And that is precisely what happened here.
Brilliant, Brilliant!
It’s not ‘fear’ that’s running through the country, it’s ANGER.
Until the ‘crony capitalists’ are gone, this won’t get any better. Does anyone think that DC/Wall Street would change anything?
Welcome to the New Economy!
My recent letter to the editor of the local fishwrapper:
11/30/2008
The Tom Friedman column on the financial melt-down of 11/30 is classic MISinformation.
Friedman portrays the greedy bankers and Wall Streeters as the villains.
Yes, many of them may have gamed the system, bundling this “junk” into “derivatives” even PhDs in economics didn’t understand.
But if that “system” hadn’t been created, the gaming would not have even been possible. Friedman conveniently failed to mention that the system was a creature of the 1977 Jimmy Carter sponsored “Community Reinvestment Act.”
Allegedly designed to make the American Dream of home ownership available to all, it was expanded in the Clinton years to include even those with virtually no prospect of repaying. Lenders who refused to “get with the program” were threatened with loss of their charters.
Until it unraveled, it was a brilliant Democrat vote-buying scheme.
And as it unraveled, Barney Frank, Chris Dodd, et al stood silently by and watched.
http://www.latimes.com/news/opinion/commentary/la-oe-cutler6-2008dec06,0,6357166.story
This article wins the Head up Rear Award.IMHO.
bump
They are making the most productive cars in Brazil, but the UAW won’’t let them use the same techniques here in the USA.
I’ll find the link. Detroit News is the source.
To me, the cause of credit collapse (CC) is the rapacious and unregulated, unfettered proliferation of credit and debt instrument "engineering" that has gone on. Most people understand by now that we are not rescuing "mortgages" or "banks" or "AIG" or "Fannie" with these bailouts: We are rescuing large-scale credit structures, the opacity of which blindsided the financial system. The continued opacity, upon near-vaporization of these entities, has, upon closer examination, resulted in all these "come to Jesus" moments all over the financial system. It has been a FINANCIAL phenomenon, not (until recently) an ECONOMIC phenom.
I'm not a big fan of assigning "blame" per se, nor am I a big fan of regulation. But the single element of regulation that would have prevented CC would have been the placement of the default swaps and debt arrangements so plaging us now on transparent exchanges operated by a third party...EXACTLY how the stock, options, and comodities markets run today. In those markets, a neutral third party (the "exchange") is guarantor of the integrity of the arrangement and thus is mightily interested in the ability of both sides to perform. You exceed your margin requirements in a trade, accidentally or on purpose, you find out about it very quickly and act or get sold out, and I mean right now. It's just that simple. The amount of money involved in these bailouts so far would probably be enough to pay off the FACE VALUE of every mortgage in America! That's why it is not, IMO, really a mortgage problem, it's a default swap problem. No, what we are doing is bailing out the folks who levered these arrangements/contracts up 30, 50, or 80 times their face value. The threat, and it is unquestionably a serious threat, is that there simply isn't anything to hock against 30 times the value of every mortgage written or refi'ed and every leveraged buyout and every 3-year-no-payment mattress deal sold since 2005. That there isn't backing for such a credit expansion; that so many deals were written so grossly exceeding the "mother" counterparties' ability to perform [AIG, FNM, FRE et al] is PRECISELY the item that has destroyed trust in the system and has made even the strongest lenders unwilling to lend. Because there is simply no transparency out there, and every opportunity has apparently been taken to game the system and to sell bunko paper. Hank Paulson and the "strategy shift du jour" hasn't helped either. Quite simply, TRUST has been destroyed.
.....not less because people have been sold a bill of goods that government can actually fix things.
:::::::::
Yes, and as long as the the ignorant and naive half of the electorate believes this, the general condition of America will CONTINUE to deteriorate.
Good piece Brilliant. Kudos to you.
Actually, all our economic problems are caused by government oversight, interference and regulation of business. Free the American free-enterprise, competitive, capitalist system from government and all our problems will disappear.
Exactly right...and we need to communicate this to people if we want to win again.
The point about the automakers is an important one. The Big 3 are criticized for not successfully selling small cars, but their labor costs have put them into the position of being unable to sell small cars profitably. Besides, small cars were only especially popular in the last couple of years.
The way back is the free market. Really free. We have to cut regulation and taxes. We must shrink the size and scope of government. If we’re not willing to seriously entertain these ideas, we don’t deserve to be in power.
“If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” -Ronald Reagan
Response; Absolutely Correct.
Comment: I believe that this point is almost ready to be accepted by the public at large. I do not have the political know how but believe that a well run campaign with names, dates, acts, omissions, conditions, circumstances and events would effectuate a peaceful revolution. Further, it might even result in jail time for the politicians responsible. If not stopped the coming revolution will be other than peaceful.
Quite simply, TRUST has been destroyed.
Still, I see that as a government failure. Where did these instruments originate? In mortgages. The ability to trust that basic instrument was gutted by ‘lets roll the dice on this’ Barney Frank and most popular contribution receiver Christopher Dodd. If I’m a bank that has been forced/encouraged to make a risky loan, I am going to treat it like a hot potato, bundle it up with a few others and get it off my books. Would setting up the trading exchange you describe not have been in opposition to the socialist goal of placing everyone in mansions?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.