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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Ron who wrote (150462)	11/17/2010 7:27:19 PM
From: Steve Lokness	Read Replies (1) \| Respond to of 542149

Ron; Thanks for the response. So Krugman's link is quite relevant. You argue a good point and I would not disagree that deregulation had a lot to do with the economic collapse - it surely did. We should regulate the heck out of the GS of the world until they bleed - honestly I feel that way. Anytime a bank such as GS becomes so arrogant that they think they are doing....."God's work"......it is time for change. That deregulation led to the creation of whacko instruments of "WMD", as someone called them, made the housing mess global, but it in itself did not create the incentives for individuals to buy houses, buy second houses, speculate in housing, flip houses and use their homes as ATM machines. Especially low interest rates created this incentive. People didn't refinance their home to buy a boat and take a trip to Europe because of deregulation - they did so because the interest rates kept falling and they could refinance or take out a second and still feel rich because housing prices kept climbing and their payment remained the same or even could go down. It was like free money to them. It was of course also a ponsi scheme of sorts. Behind every single loan there is a personal story of why that person felt compelled to borrow and I just do not believe deregulation played a part in that story. Deregulation contributed to the severity for sure - but was not the underlying cause. .........This issue I believe Krugman does just not get. Remembered he encouraged housing at the time it ballooned. But none of this is why Krugman made the comparison; he did because other states bailed out Texas. Apparently easier than other countries bailing out Ireland.