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How accurate is this? First time I've heard this view of the financial crisis.
Quote:
The real roots of the crisis lie in a flawed response to China. Starting in the 1990s, the flood of cheap products from China kept global inflation low...
Yes... it is regulation that lead to the businesses making decisions as they did... when you start shutting doors they start looking for windows... you create a mess with over-regulation as much as you do with under-regulation... there is a balance and that balance is more with under-regulation... when you start over-regulating, you are, in essence, STEALING from taxpayers but too bad taxpayers don't really realize this and demand more regulations because they think it will save them money (as the propaganda is made by Big Media/Big Business/Big Government)... you should be VERY VERY suspect when all three are demanding more... and that Joe Sixpack is demanding less... but people are idiots and don't make the obvious connections... so be it... stupid is as stupid does...
How accurate is this? First time I've heard this view of the financial crisis.
He's just another talking head babbling nonsense formulated by a huge propaganda machine whose sole purpose is to keep us confused and directionless. His words are a ruse. Fact of the matter is the FED he glorifies is an unconstitutional abomination that manipulates the world market for the benefit of its private shareholders at all of our expense.
That pain you are feeling in the backside of your economic system is the erect phallus of the FED making penetration for its own pleasure. It's not the liberals, it's not the communists, it's not the welfare mothers, it's not the borrowers.
That pain you are feeling in the backside of your economic system is the erect phallus of the FED making penetration for its own pleasure. It's not the liberals, it's not the communists, it's not the welfare mothers, it's not the borrowers.
Wow that was awesome! Your posts are one of the few things keeping me smiling in these disgusting times.
How accurate is this? First time I've heard this view of the financial crisis.
It has nothing to do with it. If you want to place blame, put it on American consumers who were (and still are) hell-bent on satisfying every infantile urge, regardless of the consequences.
It has nothing to do with it. If you want to place blame, put it on American consumers who were (and still are) hell-bent on satisfying every infantile urge, regardless of the consequences.
Agree. Consumers borrow too much. Nation borrows too much. Companies like Lehman borrow 30 times their assets etc. Everyone is to blame. The issue to me is how this is being handled.
Someone breaks into your house and steals $1000 and you put up an alarm system, call cops, go ballistic. Now, if you had $1000 in an index fund middle of last year, you are down about 40%. Many people with a million or so retirement savings are down by $400,000. If they live in California or Florida, their houses are also worth much less too. Yet we are not calling the cops. Our representatives have just bailed out some of the people who got us in this mess. In my opinion, however unpalatable, the bailout was needed to inject liquidity. But, it should have been accompanied with a full blown FBI sting that nets at least some ofl the CEOs and very senior management that contributed to this. Afterall, these executives stood to gain the most, maybe they should pay the most. Some blood on the streets would be good - that goes for idiots who borrowed too much for thier homes too. Else, we all are never going to learn and be in the same situation 10 years from now.
Deregulation is to blame some. We used to say communism does not work becuase it disregards the human nature. We now seem to have some proof that less regulation of free markets is also questionable because of the same reason - human greed. Wonder what extreme free market theorists have to say about it.
How accurate is this? First time I've heard this view of the financial crisis.
The idea that substitution of cheap Chinese labor content for expensive US labor content was about all that was allowing the Bush administration to claim that it had kept inflation under control was a recurrent theme over roughly 2001-2003. Mallaby is not onto anything new there. It would be very hard to argue that such substitutions could have continued indefinitely, and he is on firm ground in suggesting now as was suggested then that the Fed would have been better off in assuming that the inflation rate was a few points higher than it actually was.
There is no evidence of course that all this somehow went over the heads of the Fed. They were faced with other exigencies however, such as restoring order and confidence after 9/11 and reacting to the persistence of the First Bush Recession. The gap between actual and assumed inflation rates gave them practical room to take action on those issues, so they took it. I think Mallaby then underestimates considerably the role that laissez-faire deregulation and passive oversight played in taking a risky and relatively short-term situation and making it much, much worse.
His ideas on China-based asset inflation are not on such good ground in my view. He seems to assume that all of the very substantial surplusses that China was indeed accumulating were simply poured over into asset markets and that Chinese demand was somehow extraordinarily larger than demand that would merely have materialized elsewhere under different circumstances. I don't think he's made his case (at least in this piece) on either count.
Economic histories are fluid and dynamic...scenarios in which many strands come to weave themselves together and then unravel again. There are rarely the sort of one-to-one, this-caused-that events that make analysis easy. There is not much dispute over the fact that labor cost differentials and resulting low inflation numbers were a factor in setting the stage. But the actors and the roles they came to play on that stage require I think a broader bit of biography and background than what Mallaby has allowed them.
He's just another talking head babbling nonsense formulated by a huge propaganda machine whose sole purpose is to keep us confused and directionless.
Whatever happened to all that Personal Responsibility® talk? Rather than wandering about confused and directionless, how about taking some initiative by going out and getting up to actual speed on some of the issues here. Doing that would, for instance, have allowed one to avoid holding the low-grade beliefs and opinions about the Fed that are put forth in the rest of the post.
This suggestion, btw, applies far more broadly than merely to the OP. There has been a LARGE number of supposedly authoritative claims and pronouncements put forward regarding the bailout and its supposed purposes, meanings, origins, and implications that are based either on nothing or on worse than nothing. Then people wonder why their representatives in Congress vote on a different basis. Perhaps it's the case that they and their staffs know something (or actually, many things) that you don't? Is that a possibility out there, or has everyone already done all the homework that there is to do on this matter? Somehow, I am not left with very much faith in this latter idea...
Location: On the "Left Coast", somewhere in "the Land of Fruits & Nuts"
8,852 posts, read 10,455,696 times
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Quote:
Originally Posted by Bostonian08
He's just another talking head babbling nonsense formulated by a huge propaganda machine whose sole purpose is to keep us confused and directionless. His words are a ruse. Fact of the matter is the FED he glorifies is an unconstitutional abomination that manipulates the world market for the benefit of its private shareholders at all of our expense.
That pain you are feeling in the backside of your economic system is the erect phallus of the FED making penetration for its own pleasure. It's not the liberals, it's not the communists, it's not the welfare mothers, it's not the borrowers.
"Regulation" and "deregulation" are not one thing; it really depends on what is being regulated, and the manner in which that regulation is carried out.
For example, regulation isn't the same as prohibition. What if, under the Commodity Futures Modernization Act, regulation of credit default swaps had not been banned? What if registration had been required for those contracts? That would have resulted in more regulation, but perhaps less systemic risk to the financial markets.
If you just want blanket "deregulation," you lose the ability to make those kinds of distinctions.
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