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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Bilow who wrote (116928)	11/15/2008 2:29:56 AM
From: Skeeter Bug	1 Recommendation Read Replies (1) \| Respond to of 132070

Bilow, i'm sure Knighty will respond with his opinion, but i'd like to share mine. the causes of this debacle are multi-faceted. it is not all government and it is not all the people. here's my list of what the government did wrong: 1. they created an interest rate policy that was destined to create the biggest credit bubble in history - and it did. they could have had a policy that didn't allow this. 2. they gave the uber rich uber rich tax cuts and the uber rich didn't spend the money on the economy, they invested. this pool of money was so large that non even wall street had the investments to meet its demands... so they created them, in some cases, out of whole cloth. 3. they didn't regulate credit default swap insurance. if the insurers were required to set aside the actual cash to fund the insurance policies, we wouldn't be looking at a $50 trillion credit default swap market. we probably would be looking at 5-10% of that amount. 4. bush sued new york to prevent the state from requiring an "ability to pay" for mortgage loans. iow, they prevented states from requiring borrows to actually have the ability to pay factored into the loan process. i don't think anyone is saying booms and busts will never happen. they will. but the magnitude can be manipulated by smart policy. instead, the clinton and bush administrations continued to throw gasoline on the fire instead of trying to contain the fire. i can't find the chart, but i understand that housing was something like 40% above the next highest pricing metric in US history - that 40% can be directly laid at the feet of the politicians. starting with clinton's bubble and then bush picking up the bubble torch and carrying it. remember that the nikkei recently hit a 26 year low. there will be another boom, but we might not be alive to see it given the fundamental damage done to this economy.

To: Bilow who wrote (116928)	11/15/2008 11:24:56 AM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Carl, I wasn't talking about the international economy as much as the domestic that has been hurt by the Bush stumbles. Iceland's failure was pretty much financial scamming, including direct embezzlement. True, capitalist states go through crises, but the idea that we can have guns and butter at the same time is one that nearly always pushes disasters on to the stage. LBJ proved that when he took a healthy economy and tried to run The Vietnam War at no monetary sacrifice to the domestic economy (a few tens of thousand of young people dead and a little country nearly destroyed, but no big problems for the wealthy Americans who didn't have kids in Vietnam). He did it the same way Bush did it, with huge debt expansion. The fact is, war has a large, damaging cost and to try to ignore that cost and have it borne by a few always takes the economy down. That cost shared by all Americans, if not equally, at least some sharing in every case, is one of the restraints on a President that helps prevent dumb wars from getting started. Both LBJ and Bush started wars of ignorance and tried to hide the cost. A tax cut staying in force after the outbreak of war is one of the true scams of the Guns and Butter fantasy. Certainly investors and ignorant voters who reelected Bush are to blame. But the stupid will always be with us. It is up to a smarter and less evil govt. to mitigate their impact.