[Nattering Nabob]

During the 2007 financial crisis, many wanted to let the market fail if that's where it was headed...no bailouts, no stimulus...no govt action...

If they had had their way, where do you think the economy would currently be?

[Potemkin]

If they had had their way, where do you think the economy would currently be?

In the shitter.

Capitalism would have collapsed and a brave new socialist world order would be emerging....

Unfortunately, the bastards bailed out the bankrupt capitalist financial system.

[Melodramatic]

Capitalism would have collapsed and a brave new socialist world order would be emerging....

Then socialism would fail because of its coercive nature and capitalism would reemerge, fail because of coercive intervention and then socialism would reemerge and...

What is the common divider here?

[Potemkin]

Then socialism would fail because of its coercive nature and capitalism would reemerge, fail because of coercive intervention and then socialism would reemerge and...

What is the common divider here?

Failure?

[DanDaMan]

During the 2007 financial crisis, many wanted to let the market fail if that's where it was headed...no bailouts, no stimulus...no govt action...

If they had had their way, where do you think the economy would currently be?

In the toilet not owing as much as we do now.
As it is, the pain will be doubly long.
America will have it's pain quadrupled.

[Kman]

It would be in a restructuring process right now and eventually real market directed economic growth would start occuring within a year a two, it wouldnt have been easy, but it would have been much healthier for the US economy in the long run if you had let these corrupt wall street firms go bankrupt, since that would have taught the banks that survived this purge to be very careful about their investments in the future.

The misallocations of resources in the US economy has not been dealt with at all because of the bailouts and that is why when the market correction comes (and it will come) it will be that much more brutal and painful.
The US will go down in flames Greek style and when it does the Fed will probably try and print its way out of the economic problems just like they did in Germany in the Weimar Republic.

[PBVBROOK]

^^

I agree with most of that.

Sans bailouts the only way out of a depression (and it would have been a deep one) is to make stuff and sell it.

I think the US is on a collision course with a crisis worse than the Greeks. I think that, unlike the Greeks, we are by temperment better equipped to deal with it.

We also have the option of war.

[ksu_aviator]

It would be in a restructuring process right now and eventually real market directed economic growth would start occuring within a year a two, it wouldnt have been easy, but it would have been much healthier for the US economy in the long run if you had let these corrupt wall street firms go bankrupt, since that would have taught the banks that survived this purge to be very careful about their investments in the future.

The misallocations of resources in the US economy has not been dealt with at all because of the bailouts and that is why when the market correction comes (and it will come) it will be that much more brutal and painful.
The US will go down in flames Greek style and when it does the Fed will probably try and print its way out of the economic problems just like they did in Germany in the Weimar Republic.

Absolutely correct. Let's not forget that it was the socilialistic idea of "everyone deserves a house" that lead to the mess to begin with.

But we also can't forget that government borrowing is responsible for slowing the economy. The economy is not based on the number of dollars in circulation (that is supposed to remain fixed), it is based on how often each dollar changes hands. A $14 trillion GDP means that $1 changed hands 14 trillion times or 14 trillion dollars changed hands once...however you want to look at it. Since the Fed tries to keep the number of dollars in circulation at around $8 trillion...if the government borrows $1 trillion for a period of one year the economy is deflated.

Let's do some math. If you have a $14 trillion economy and $8 trillion in circulation, the average dollar changes hands once every 6 months, 25 days and 12 hours. So the $1 trillion borrowed by the government and held for a year (this is the deficit) has an economic impact of removing $1.75 trillion from the economy. If the economy was $14 trillion GDP, the new GDP would be $12.25 trillion.

So where would the economy be? $1.75 trillion ahead of where it is now...roughly.

[PBVBROOK]

Absolutely correct. Let's not forget that it was the socilialistic idea of "everyone deserves a house" that lead to the mess to begin with.

Absolutely incorrect. This notion that the recession was caused by some government plan to give people who shouldn't have them homes has been completely discredited. Other than a few idiot right-wingers like Glen Beck and Sean Hannity who are selling this to the sheep not a single serious student of the economy would accept this.

It is frightening to see the shallowness and willingness to accept a slogan as cause and effect that is so prevalent in the US these days.

Please read some serious economists on this failure. You will find that it was FAR more complicated than you imagine and that the government failure was not in encouraging loans but rather in failing to exercize oversight. The record is clear. Many many people both in and out of government predicted this crash an posited solutions to head it off. Wall street was simply making too much money on the derivative market to pay any attention. The bankers knew they were selling snake oil as witnessed by the fact that they sought to reinsure themselves for what they knew were very risky investments.

In short. This did not happen because the government encouraged (in a veeeery minor way) home ownership. It happened because all of the industry players became embroiled in a get rich scheme. Read the scholarship. Drop the slogans. And for God's sake stop listening to Fox News.

[ksu_aviator]

Talk about projecting.

Here is what happened...factually.

1. Globally, savings rates provided excess liquidity.
2. Domestically, the government pushed for risky loans.
3. Locally, each bank...looking to expand its market share...gave out risky loans.
4. Financially, risky loans were packaged with other good investments.

To say that the idea that "everyone deserves a house" wasn't part of the problem is ignorant. The shallow argument is to say this was about greed.

[DanDaMan]

Quote:
Absolutely correct. Let's not forget that it was the socilialistic idea of "everyone deserves a house" that lead to the mess to begin with.

Absolutely incorrect. This notion that the recession was caused by some government plan to give people who shouldn't have them homes has been completely discredited. Other than a few idiot right-wingers like Glen Beck and Sean Hannity who are selling this to the sheep not a single serious student of the economy would accept this.

You know what...it actually doesn't matter what the straw was.
What IS and WILL destroy us is the Social Justice entitlements and public union pension plans about to crush the states.
Progressiveness to the Left is a failure because it cannot handle the big natural and unnatural turns for the worse.
Those that will not be hurt so bad are the conservative types that saved and paid things off.
Unless of course you lobby to destroy their savings and property to rescue others. Will you?

[Kman]

Those that will not be hurt so bad are the conservative types that saved and paid things off.

That depends on what these conservatives save their money in, if they buy gold or silver then their savings wont lose value, if they however save their money in dollars then they will get punished severely since inflation is basicly just a transfer of wealth from savers to the people who are up to their eyeballs in debt. If the dollar experiences inflation and loses lets say 50% of its value (when measured vs gold or barrels of oil) then the people with savings in the bank will lose 50% of their purchasing power (thats bad), while the people who hold tons of debt will have their loan halved in value (thats good for the debtor).

[DanDaMan]

That depends on what these conservatives save their money in, if they buy gold or silver then their savings wont lose value, if they however save their money in dollars then they will get punished severely since inflation is basicly just a transfer of wealth from savers to the people who are up to their eyeballs in debt. If the dollar experiences inflation and loses lets say 50% of its value (when measured vs gold or barrels of oil) then the people with savings in the bank will lose 50% of their purchasing power (thats bad), while the people who hold tons of debt will have their loan halved in value (thats good for the debtor).

True. Now may be the time to buy things on credit. Maybe the wife should get that Lexus now. Used, of course so, we don't take the depreciation hit. What do you think?

[PBVBROOK]

1. Globally, savings rates provided excess liquidity.
2. Domestically, the government pushed for risky loans.
3. Locally, each bank...looking to expand its market share...gave out risky loans.
4. Financially, risky loans were packaged with other good investments.

OFGS! That is an extreme oversimplification. Suffice it to say that the government "push" for risky loans is just so much hyperbole. It is an excuse for bad behavior on the part of the banks. I am too tired to launch into this again. You seriously need to study the literature. Start with "To Big to Fail".

When did it happen that the democrats became more attuned to the economy than Republicans did? A word of warning for those who call themselves conservatives, Tea Pary and libertarians. You are ceeding a tremendous potential for political success because you have forgotten the greatest message in modern politics. Clinton beat the Republicans TWICE because while the republicans were running their anti-social welfare, American Values campaign the Clinton folks, lead by an unknown named George Stephanopoulos, put a big sign up in their campaign headquarters. The sign read "Its the Economy Stupid."

Nothing has changed. While the Republicans follow wierdos like Ron Paul, crackers like Sean Hannity and economic dumb-asses like Glen Beck the Democrats are quietly consolidating their power and arranging damage control for November. The American people are not stupid. They are not going to buy the nonsense that our economy failed because too many black people got home loans. (That is the sub-text you know.)

The average American knows that his/her quality of living was sacraficed on the altar of free trade and unregulated business. They know where the jobs went and it is not into the mortgage banker's coffers. It is to China, Mexico and other third world national sweat-shops.

Get a grip people. Blaming the government for the cheap money created by mortgage based securities is like blaming earthquakes on dirt. The bankers created this problem and the governments real failing was to not regulate this industry very carefully. Free enterprise is not the same as unregulated enterprise. That is just the conclusions of some very stupid rand-roids.

[Rei Murasame]

A lot to agree with in this thread:

It would be in a restructuring process right now and eventually real market directed economic growth would start occuring within a year a two, it wouldnt have been easy, but it would have been much healthier for the US economy in the long run if you had let these corrupt wall street firms go bankrupt, since that would have taught the banks that survived this purge to be very careful about their investments in the future.

The misallocations of resources in the US economy has not been dealt with at all because of the bailouts and that is why when the market correction comes (and it will come) it will be that much more brutal and painful.

This is one of those moments where we agree!

In part that is why I'm a bit oddly satisfied that Greece went belly-up (despite knowing it was manipulated by Goldman Sachs), it jolted the European politicians into a sense of alertness and panic which has made them more amenable to dealing with various issues. So it may just backfire on the manipulators eventually.

The average American knows that his/her quality of living was sacraficed on the altar of free trade and unregulated business. They know where the jobs went and it is not into the mortgage banker's coffers. It is to China, Mexico and other third world national sweat-shops.

Also this! I agree here too.

Unfortunately, the bastards bailed out the bankrupt capitalist financial system.

Indeed, it's a little funny that Financialcapitalism keeps surviving by telling its followers one narrative about Free Market and then bailing itself out by using the captured State at every turn. PVBROOK describes it:

Get a grip people. Blaming the government for the cheap money created by mortgage based securities is like blaming earthquakes on dirt. The bankers created this problem and the governments real failing was to not regulate this industry very carefully. Free enterprise is not the same as unregulated enterprise.

Well said, this thread is fantastic, in my view.

[Rilzik]

deleted by myself

[Cartertonian]

Free enterprise is not the same as unregulated enterprise.

QFT.

Sadly, however - particularly for the hard-core libertarians - nothing can be said to be free if it is in any way regulated. Without wishing to go down that rabbit-hole yet again, I fail to see the difference between that PoV and Anarchism...

[ksu_aviator]

OFGS! That is an extreme oversimplification. Suffice it to say that the government "push" for risky loans is just so much hyperbole. It is an excuse for bad behavior on the part of the banks. I am too tired to launch into this again. You seriously need to study the literature. Start with "To Big to Fail".

Oh they didn't? President Obama (before he was President) was part of a team that sued Citi bank for not giving loans. And they based their argument on the Fair Housing Act and CRA.

Obama represented Calvin Roberson in a 1994 lawsuit against Citibank, charging the bank systematically denied mortgages to African-American applicants and others from minority neighborhoods

http://www.suntimes.com/news/politics/o ... 17.article

And then, even after everyone saw sub prime loans destroy the economy, Obama pressured the same banks to continue the same devastating practices.

For many in the Administration the biggest economic concern is the country's stubbornly high unemployment. The best way to attack that problem is to stimulate small-business growth, but that won't happen as long as banks sharply limit lending to smaller companies. For their part, bankers feel they are responding prudently to a tough economy by tightening loan standards across the board.

...

So Obama will alternately threaten and plead with banks to open their purse strings. "One of the main messages from this meeting is that the financial industry received extraordinary help from the government — and ultimately the taxpayer — and now the industry has an obligation to help the small-business owners," says White House spokesperson Jen Psaki.

Read more: http://www.time.com/time/business/artic ... z0tJ1UqN3C

When did it happen that the democrats became more attuned to the economy than Republicans did? A word of warning for those who call themselves conservatives, Tea Pary and libertarians. You are ceeding a tremendous potential for political success because you have forgotten the greatest message in modern politics. Clinton beat the Republicans TWICE because while the republicans were running their anti-social welfare, American Values campaign the Clinton folks, lead by an unknown named George Stephanopoulos, put a big sign up in their campaign headquarters. The sign read "Its the Economy Stupid."

Nothing has changed. While the Republicans follow wierdos like Ron Paul, crackers like Sean Hannity and economic dumb-asses like Glen Beck the Democrats are quietly consolidating their power and arranging damage control for November. The American people are not stupid. They are not going to buy the nonsense that our economy failed because too many black people got home loans. (That is the sub-text you know.)

The average American knows that his/her quality of living was sacraficed on the altar of free trade and unregulated business. They know where the jobs went and it is not into the mortgage banker's coffers. It is to China, Mexico and other third world national sweat-shops.

Get a grip people. Blaming the government for the cheap money created by mortgage based securities is like blaming earthquakes on dirt. The bankers created this problem and the governments real failing was to not regulate this industry very carefully. Free enterprise is not the same as unregulated enterprise. That is just the conclusions of some very stupid rand-roids.

Seriously...very seriously...can't anyone on this forum just debate the facts instead of bloviating about how ignorant the other side is?

[PBVBROOK]

Oh they didn't? President Obama (before he was President) was part of a team that sued Citi bank for not giving loans. And they based their argument on the Fair Housing Act and CRA.

And you can't see the difference between red-lining and giving loans to unqualified people? Really?

And oh by the way. Obama was the junior member of the team. He never argued in court. His total involvement was 2 hours and 50 minutes of billable hours. He had just graduated from Law School. And the case had absolutely nothing to do with income or credit qualifications of the applicants as it was a class action suit about banks denying loans based upon geographic areas excluding primarily minority neighborhoods from loans regardless of the credit-worthiness of the applicant. Citibank settled considerable money on in cash on several of the class members and agreed to end the practice. See?

And then, even after everyone saw sub prime loans destroy the economy, Obama pressured the same banks to continue the same devastating practices.

Are you SERIOUS? Whose money was he asking them to loan? The money the government had given them specifically so they would loan it to small business and stimulate the economy.

You appear not to know that there is a difference between a sub-prime loan and a business loan. They are two different things altogether. Using the term "sub prime" is just wrong. We gave a shit-pot load of taxpayer money to the banks for them to loan to business and they were sitting on it. Their claim that they were just being more carefull was clearly just so much bullshit.

And then I ask why you posted the quote that argues against your point?

Seriously...very seriously...can't anyone on this forum just debate the facts instead of bloviating about how ignorant the other side is?

You have been watching too much O'Rielly factor. I am getting very tired of people on the right speaking ex-cathedra on the economy and simply burping up what the talking heads are saying. Look at your own post guy. Both of your points were based upon right-wing talking points that were not based in fact in the first place. I don't blame you for the ignorance of the facts that led you astray. I blame you for not checking.

Read this article:

http://www.nytimes.com/2009/01/18/business/18bank.html?_r=1

It will open your eyes and show you just what lunacy has been coming from Limbaugh, Hannity, Beck and a myriad of Republican politicians when they make these completely false claims about the Obama administration.

I don't like what Obama is doing. There is plenty to criticize him for. You just happened to choose two that were completely untrue. And then in the next sentence, claim I was the one who was bloviating. Sheesh!

[ksu_aviator]

And you can't see the difference between red-lining and giving loans to unqualified people? Really?

LOL...all this is is an admission that banks were forced to abandon their guidelines. Granted you label it something that implies racism...but you still admit that they were forced into it.

And oh by the way. Obama was the junior member of the team. He never argued in court. His total involvement was 2 hours and 50 minutes of billable hours. He had just graduated from Law School. And the case had absolutely nothing to do with income or credit qualifications of the applicants as it was a class action suit about banks denying loans based upon geographic areas excluding primarily minority neighborhoods from loans regardless of the credit-worthiness of the applicant. Citibank settled considerable money on in cash on several of the class members and agreed to end the practice. See?

I read the entire article. I know exactly what his participation was. But what you can't escape is the fact that Obama was part (even if it was a small part) of the team that worked towards forcing banks into risky loan guidelines.

Are you SERIOUS? Whose money was he asking them to loan? The money the government had given them specifically so they would loan it to small business and stimulate the economy.

You appear not to know that there is a difference between a sub-prime loan and a business loan. They are two different things altogether. Using the term "sub prime" is just wrong. We gave a shit-pot load of taxpayer money to the banks for them to loan to business and they were sitting on it. Their claim that they were just being more carefull was clearly just so much bullshit.

And then I ask why you posted the quote that argues against your point?

Does it matter whose money it was? What if you had a friend that gambled away his money and needed money to pay his mortgage? What Obama did would be the equivalent of giving the friend the money and telling him to go win it back.

You have been watching too much O'Rielly factor. I am getting very tired of people on the right speaking ex-cathedra on the economy and simply burping up what the talking heads are saying. Look at your own post guy. Both of your points were based upon right-wing talking points that were not based in fact in the first place. I don't blame you for the ignorance of the facts that led you astray. I blame you for not checking.

And? What if the "right wing talking point" happens to be the truth? So far you've not posted anything that counters my links...you just made the claim that I'm wrong and we are apparently supposed to believe that on good faith.

I'm not ignorant of the facts and I would appreciate it if you would stay away from the implied personal attacks. Your use of strong language in an attempt (a failed one at that) to convince me you are right won't work. Rather, it shows the objective reader that I have the stronger argument. Stick to facts, as I have, and we can have a good debate.

Read this article:

http://www.nytimes.com/2009/01/18/busin ... .html?_r=1

It will open your eyes and show you just what lunacy has been coming from Limbaugh, Hannity, Beck and a myriad of Republican politicians when they make these completely false claims about the Obama administration.

^this says exactly what I've been saying...what are you trying to prove with this article? That I'm right? Cause you did that skippy.

I don't like what Obama is doing. There is plenty to criticize him for. You just happened to choose two that were completely untrue. And then in the next sentence, claim I was the one who was bloviating. Sheesh!

Well...you spent the entire post attacking my intelligence with a break to post an article that supports everything I've said. So, bloviate away.