Government, Not Free Market, Caused Subprime Crisis

[BBSA]

That's poor monetary policy.

The LACK of regulation allowed the rise in risky lending.

Yes, poor monetary policy AND Freddie Mac and Fannie Mae. In other words poor government NOT the lack of regulations created the problem.

 

[Sherbang]

Not true, I quote from the article:



It was not the lack of banking regulations but government involvement in the market that caused the problem.

Blaming one or the other is stupid. GSE's are government sponsored, but government itself is sponsored by big business (owned) so really it's one and the same. What we have here is a combination of government creating opportunities but failing to regulate them and big business (banks) taking advantage of these opportunities to enrich themselves.

Government not only failed to provide proper regulation but actually actively encouraging easy access to credit at reduced costs through GSE's.
Directors of these big businesses and banks took advantage of this situation to enrich themselves and satisfy their greed at the taxpayers expense.

 

[BBSA]

Blaming one or the other is stupid. GSE's are government sponsored, but government itself is sponsored by big business (owned) so really it's one and the same. What we have here is a combination of government creating opportunities but failing to regulate them and big business (banks) taking advantage of these opportunities to enrich themselves.

Government not only failed to provide proper regulation but actually actively encouraging easy access to credit at reduced costs through GSE's.
Directors of these big businesses and banks took advantage of this situation to enrich themselves and satisfy their greed at the taxpayers expense.

Joulus, I'm not prepared to debate this issue with you because you think you have the right to speak in a condescending manner to people.

Remember: http://mybroadband.co.za/vb/showpost.php?p=2155026&postcount=99

 

[unsecluded]

dont know about you two...but government is the muscle for corporations when they should be serving the people. government should have let them fall but still, without good governance corporations would exploit which is what is currently happening...actually its whats been happening throughout history in various forms. There's a simple formula in Capitalism and that is for someone to be wealthy, someone has to be poor and sadly most of the time, it's many people.

"The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson."
- U.S. President Franklin D. Roosevelt in a letter written Nov. 21, 1933 to Colonel E. Mandell House

"It is an old maxim and a very sound one, that he that dances should always pay the fiddler. Now, sir, in the present case, if any gentlemen, whose money is a burden to them, choose to lead off a dance, I am decidedly opposed to the people's money being used to pay the fiddler...all this to settle a question in which the people have no interest, and about which they care nothing. These capitalists generally act harmoniously, and in concert, to fleece the people, and now, that they have got into a quarrel with themselves, we are called upon to appropriate the people's money to settle the quarrel."

 

[Xarog]

Free market is not perfect but it is defently more efficiant than any goverment.

So? It's also more effecient at creating a royal mess.

What the hell makes you think that in the absence of a reserve bank that the banking elite wouldn't create their own system that they could use to their advantage?

Time and time and time and TIME again it has been made abundantly clear that all businesses act ultimately in their own self-interest and in the interests of maximising profits.

Would you do away with government regulating the quality of the food we eat? Would you do away with regulatory bodies which take companies to tast for damaging the ecology? For poisoning our national/global water supply? China doesn't regulate its businesses and the result is melamine in our foods.

So why the hell do you think the banking/financial sector would have any more scruples? Short answer : It doesn't, and that's why it needs to be regulated.

 

[alloytoo]

Yes, poor monetary policy AND Freddie Mac and Fannie Mae. In other words poor government NOT the lack of regulations created the problem.

Freddie Mac and Fannie Mae are not government, they were at most parastatals created by Roosevelt toward the end of the great depression.

It's their deregulation in the 80's that lead ultimately to releckless behaviour.

You argument is basically that regulation shouldn't be introduced because a lack of regulation and poor monetary policy led to a disaster.

 

[unsecluded]

+1
but we need corrupt-free governments to instill those regulations otherwise they just dupe the people into believing it's for their own good

 

[BBSA]

You argument is basically that regulation shouldn't be introduced because a lack of regulation and poor monetary policy led to a disaster.

No please, I never argued that.

Here is my argument:

To blame the current crisis on a lack of regulation is not only inaccurate, it's dishonest. The true failure of the meltdown in the financial sector lies with the institutions of government that are now attempting to regulate themselves out of the mess they made of the economy. After years of interest rate manipulation, the government's micromanagers of the economy-the Federal Reserve and the Treasury Department-are now gaining greater power through the subprime crisis they helped to create.

 

[Xarog]

Sadly there is no perfection either in economic systems nor in government. I think the best idea is a "balance of terrors", i.e. big business and government at each other's throats.

At least, from what I've seen, that's when the people in society are the happiest, the best fed, the most enlightened, etc...

 

[Xarog]

No please, I never argued that.

Here is my argument:

That micromanagement with additional regulation would have also prevented the crisis, though.

The problem is that the financial industry lobbied to get those very regulations (glass-steagal act, anyone?) repealed. They knew what they were doing and wanted to do. I think thus it's fair to give part of the blame to them. (And when many if not most of the people running the fed/treasury and the monetary policies come from the banking background, then the whole picture starts to become downright sinister.)

 

[unsecluded]

Xarog

Sadly there is no perfection either in economic systems nor in government. I think the best idea is a "balance of terrors", i.e. big business and government at each other's throats.

At least, from what I've seen, that's when the people in society are the happiest, the best fed, the most enlightened, etc...

hehe...That's called, dare i say it, Socialism...

but without Capitalism, there would be no more 'war on terror'

 

[BBSA]

+1
but we need corrupt-free governments to instill those regulations otherwise they just dupe the people into believing it's for their own good

You will never get a corrupt-free government.

 

[BBSA]

So? It's also more effecient at creating a royal mess.

As stated it was NOT the free market that created the mess.

 

[Xarog]

hehe...That's called, dare i say it, Socialism...

but without Capitalism, there would be no more 'war on terror'

Define socialism (seriously, the term means just about anything these days). What I mean is rather heavy government monitoring of corporate activities, but with corporations still having enough freedom to challenge government.

As for the "war on terror", that's mostly just a front for economic/political imperialism. The overwhelming majority of terrorist activities are politically motivated.

 

[unsecluded]

BBSA
Quote:

Originally Posted by unsecluded View Post
+1
but we need corrupt-free governments to instill those regulations otherwise they just dupe the people into believing it's for their own good

You will never get a corrupt-free government.

sad but true

That micromanagement with additional regulation would have also prevented the crisis, though.

The problem is that the financial industry lobbied to get those very regulations (glass-steagal act, anyone?) repealed. They knew what they were doing and wanted to do. I think thus it's fair to give part of the blame to them. (And when many if not most of the people running the fed/treasury and the monetary policies come from the banking background, then the whole picture starts to become downright sinister.)

ya and where has even our gold gone? who orchestrated it? why? under the guise of? when else has this happened? did i mention runs? hmmm...Ro********d Bank = runs = Bank of England = De Beers

 

[unsecluded]

Xarog

Quote:
Originally Posted by unsecluded View Post
hehe...That's called, dare i say it, Socialism...

but without Capitalism, there would be no more 'war on terror'

Define socialism (seriously, the term means just about anything these days). What I mean is rather heavy government monitoring of corporate activities, but with corporations still having enough freedom to challenge government.

As for the "war on terror", that's mostly just a front for economic/political imperialism. The overwhelming majority of terrorist activities are politically motivated.

I was agreeing with u man

 

[Sherbang]

Joulus, I'm not prepared to debate this issue with you because you think you have the right to speak in a condescending manner to people.

Remember: http://mybroadband.co.za/vb/showpost.php?p=2155026&postcount=99

Well, that's your prerogative...

It's also an easy out when you're unable to debate the issue (like now)!

But whatever, i'm free to put my thoughts out regardless...

 

[Arthur]

hehe...That's called, dare i say it, Socialism...

but without Capitalism, there would be no more 'war on terror'

True. We'd all be slaves to the State, living in our padded prisons, with token pocket money to spend on titillating the nerves. And freedom would be dead.

Socialism is a horror. It is unjust, inhuman, cruel, and irrational. It is one of the greatest evils ever inflicted on humankind. Even in its 'soft' form, it kills human beings, saps social and individual vitality, and ultimately destroys the very things that make us human.

Now back to the topic...

 

[Xarog]

True. We'd all be slaves to the State, living in our padded prisons, with token pocket money to spend on titillating the nerves. And freedom would be dead.

Socialism is a horror. It is unjust, inhuman, cruel, and irrational. It is one of the greatest evils ever inflicted on humankind. Even in its 'soft' form, it kills human beings, saps social and individual vitality, and ultimately destroys the very things that make us human.

Now back to the topic...

Just out of curiosity, what do you think socialism is?

 

[BrrIan]

If people can make intelligent financial decisions we would not need all these regulations to protect the "innocent".

You will still have asymmetrical information.