We Need To Move Toward A REGULATED Economy (borrow, buy, money)

[tony23]

Originally Posted by BankREO

Deregulation in a free-market economy works when you reward companies for making good choices and let them FAIL when they make bad choices.

But we can't let companies fail - think of the children!

[evilnewbie]

If you want a regulated economy, you could always move to North Korea, probably the only country with a regulated economy... have fun...

[thebigr]

Originally Posted by evilnewbie

If you want a regulated economy, you could always move to North Korea, probably the only country with a regulated economy... have fun...

I was thinking of Cuba. But living in either would make a person appreciate a free market. We will make it out of this one. Twenty years from now we will all say "This is all just like 2008, or maybe the Great Deppresion". Isn't the first time and won't be the last our country goes through these things.

[sunsprit]

Originally Posted by KevK

One thing that has become painfully obvious this week- and for awhile- is that deregulation is a complete and total FAILURE in the way we do business. If we don't do anything else, we need to re regulate virtually everything and we need to heavily regulate business in ths country.

I'd say BS to your painfully obvious rewrite of what actually happened.

The government stepped in with regulations to the banking industry that forced them to loans ... in the name of "fairness" to all ... that were totally unrealistic in any expectation of being paid back by totally unqualified buyers.

Then the government stepped in with FannyMae and FreddyMac to create a secondary buying market for all those bad loans.

The easy extension of credit to all fueled a rise in the price of the product ... housing ... that all, be it families or speculators, could buy. It got so overheated in the expectation that prices would go up indefinitely that almost anybody could re-fi at 125% of the FMV of their place. Take the money out and blow it on anything, which is what many did; even those who didn't have a prayer of paying back the original loan amount.

So, the government set up the scenario for failure by their regulation. When the times were "good", many profited from the arrangement. Now that the shortfall in the value/price points have arisen, and the huge number of mortgages are failing because the folks who couldn't pay them when they were issued are defaulting ... the gov't comes back to the majority of people and says you've got to pay the loans for the folks who couldn't ... and who should never have been extended credit to begin with.

This downfall was anticipated by many in the gov't sector long before it happened. In anticipation that honest folks would now try to flee this economy, Rangel engineered a tax on folks trying to leave the USA with their funds. At 45%, it's intentionally prohibitive.

In my view, it would have been far better for free markets to work unfettered by gov't "fairness" doctrines and have made loans to those who could pay for them. At this point, we should have let the businesses that profited from the boom pay for the downside; if that means that they go out of business, so be it. It wasn't good business to begin with. Many could see that way back in the process.

[Wild Style]

Originally Posted by sunsprit

I'd say BS to your painfully obvious rewrite of what actually happened.

The government stepped in with regulations to the banking industry that forced them to loans ... in the name of "fairness" to all ... that were totally unrealistic in any expectation of being paid back by totally unqualified buyers.

Then the government stepped in with FannyMae and FreddyMac to create a secondary buying market for all those bad loans.

The easy extension of credit to all fueled a rise in the price of the product ... housing ... that all, be it families or speculators, could buy. It got so overheated in the expectation that prices would go up indefinitely that almost anybody could re-fi at 125% of the FMV of their place. Take the money out and blow it on anything, which is what many did; even those who didn't have a prayer of paying back the original loan amount.

So, the government set up the scenario for failure by their regulation. When the times were "good", many profited from the arrangement. Now that the shortfall in the value/price points have arisen, and the huge number of mortgages are failing because the folks who couldn't pay them when they were issued are defaulting ... the gov't comes back to the majority of people and says you've got to pay the loans for the folks who couldn't ... and who should never have been extended credit to begin with.

This downfall was anticipated by many in the gov't sector long before it happened. In anticipation that honest folks would now try to flee this economy, Rangel engineered a tax on folks trying to leave the USA with their funds. At 45%, it's intentionally prohibitive.

In my view, it would have been far better for free markets to work unfettered by gov't "fairness" doctrines and have made loans to those who could pay for them. At this point, we should have let the businesses that profited from the boom pay for the downside; if that means that they go out of business, so be it. It wasn't good business to begin with. Many could see that way back in the process.

If you do nothing else tonight, read this link

[bxlefty23]

we need a real free market, a gold standard and no bailouts

[Joe107]

Hindsight is 20/20. Obviously parts of the mortgage market were under regulated as well as the leverage of some of the wall street firms.

The problem is overregulation can really hurt growth and our economy's productivity.

Alot of times regulators are not really smart and would have been trying to regulate things that didn't need to be regulated.

[coldwine]

We already have a regulated economy. We have the most regulated economy on the planet. We just happen to catch a significantly greater majority of white collar crime than any other country, and due to our financial freedoms... Well...

People are free to make stupid choices. You have to take the good with the bad. I've said it before and I'll say it again: With respect to the problems of the past 8 years, if K-Marts requires a down payment on crap in layaway, so should a bank.

In other parts of the world, and especially in other so-called first world countries, bribery and government cooperation in financial fraud is just how it goes. It's always been that way. You can pay anyone off in Egypt, and god only knows how things are handled in southeast Asia; we never find out.

So we have a very tightly regulated economy. But here's the thing: The more you regulate, the worse you make things. The more laws you have, the less civilization you have. More law=more crime, more poverty, more bad.

And it's not that the rule of law itself is the cause of these things, but law that tries to govern chance and morality always fails. People are people. The very best we can do is hope that a justice system takes care of what we catch and the impact on others is minimized. So far, so good

[Wild Style]

Originally Posted by coldwine

We already have a regulated economy. We have the most regulated economy on the planet. We just happen to catch a significantly greater majority of white collar crime than any other country, and due to our financial freedoms... Well...

People are free to make stupid choices. You have to take the good with the bad. I've said it before and I'll say it again: With respect to the problems of the past 8 years, if K-Marts requires a down payment on crap in layaway, so should a bank.

In other parts of the world, and especially in other so-called first world countries, bribery and government cooperation in financial fraud is just how it goes. It's always been that way. You can pay anyone off in Egypt, and god only knows how things are handled in southeast Asia; we never find out.

So we have a very tightly regulated economy. But here's the thing: The more you regulate, the worse you make things. The more laws you have, the less civilization you have. More law=more crime, more poverty, more bad.

And it's not that the rule of law itself is the cause of these things, but law that tries to govern chance and morality always fails. People are people. The very best we can do is hope that a justice system takes care of what we catch and the impact on others is minimized. So far, so good

laws were relaxed and regulators were not doing their job. That is a fact.

[bxlefty23]

what job? printing more money? enabling easy credit?or ecouraging the banks to behave like idiots?