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Politics : Mainstream Politics and Economics -- Ignore unavailable to you. Want to Upgrade?

To: koan who wrote (7488)	1/25/2012 8:32:37 PM
From: TimF	3 Recommendations Respond to of 85487

Politicians are less likely to think long term than business. Politicians primarily care about the next election, if they cared about the long term we wouldn't have such large deficits.

To: koan who wrote (7488)	1/25/2012 8:46:25 PM
From: Thehammer	3 Recommendations Respond to of 85487

That is common knowledge and business did that all by themselves Sorry, my friend - wrong again. There was plenty of blame to go around. Every time, I turn around I hear Bo talk about bailing out the banks, the banks paid the bail out money back. There was a tremendous amount of moral suasion generated by the feds to put more folks into houses that they own. It seemed to make good sense, just as George Bailey said in "It's a Wonderful Life: - "Doesn't it make them better citizens?" Acorn and the feds threatened to come after some of the big banks in the late 90's for not lending enough in the inner cities. FNAm and FHLMC loosened lending policies. If you look at the valuation of housing, it was in an obvious bubble as the index exceeded inflation by a significant amount fueled partially by a huge demand, low interest rates and rising commodity prices. AIG wasn't a bank and was probably the worst as you pointed out the CDO's. The rating agencies didn't do their job. Bush tried twice to reign in FNMA / FHLMC but was thwarted by Congress (especially Barney Frank and yes other Republicans). . Then we have the mom and pop folks who flipped condos in Florida. a housing crash was going to come regardless. The CDO's almost melted the financial system but didn't cause the crash. Throw the federal reserve into the mix as they kept rates too low. Bottom line they loaned a lot of money to folks who never should have been loaned money. The feds said it was fair. Houses were way over priced and we are living with those affects now.

To: koan who wrote (7488)	1/25/2012 11:33:53 PM
From: Little Joe	Respond to of 85487

"That is common knowledge and business did that all by themselves." Awful lot of dems supported those policies as well as Republicans. Even when you make a valid point your liberal bias blinds you. lj

To: koan who wrote (7488)	1/26/2012 9:41:03 AM
From: Thehammer	1 Recommendation Read Replies (2) \| Respond to of 85487

The feds gave 7.7 trillion to 10 trillion to bail out the banks for gods sake! It was stupid ass CDO's and CDS'ss that caused the crash. That is common knowledge and business did that all by themselves. Koan, To illustrate my point that the CDO's did not cause the crash but certainly exacerbated the near financial meltdown. I will use the following charts to illustrate my point: jparsons.net I remember looking at a version of this in 2004 and it I thought it foretold a big problem coming. You will note how housing diverged by a considerable margin from the historical norm, inflation adjusted house values and relative cost of house-ownership versus renting. Did the banks make a ton of bad loans - yep.... but that didn't cause the bubble which was popping before the CDO's ever triggered. The public and Congress wants a scapegoat and there is a lot of blame to go around and plenty of incompetence. Cheers