Letters to the Editor
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What Reforms Are You Looking For?
I'm just not clear on what you think needs to be done. What types of reforms are you even alluding to?
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Hoover, Reagan, Bush
I've been saying we needed a new "New Deal" for a while but I was speaking of expanding health care and retirement benefits for baby boomers. Regulation of financial markets was not the component I had hoped for......
Obama and Clinton might spend some time recalling McCain's connection to the S&L crisis.The idea that a Republican candidate would have any chance whatsoever is mind boggling.
IF every subprime loan that was in danger had been subsidized to stave off foreclosure would it have cost as much as the current approach is? Especially if you factor in falling home prices and the decimation of the home building market?
We (the US) have become a third world country. The weak dollar has reduced us to selling natural resources as our main export.
The financial system collapse, oil prices, the weak dollar, housing price deflation are all pretty serious but when you combine these things with the hole in the bucket that is the Iraq war you have a pretty serious shitstorm...........
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wealthcare
the public leans left during downturns, and leans right during upturns.
unfortunately, it's when the market is doing well that we can afford social programs, and when the market is doing poorly that we need to pay our debts.
we're talking about a nation-wide enron. bad loans hidden in fake companies (VIE's) and deficit spending with no sign of letting up. how can we afford healthcare now?
this year was the first year americans spent more on chinese imports than the federal government made in tax revenues. obama and clinton can sing it to the rafters, but unfortunately we are no longer in control of ourselves.
there's no reform that's going to convince the global debtors that own america not to make their margin calls.
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What Reforms Are You Looking For?
For starters, I think it is absurd that investors should pay less taxes than anyone else AND get huge handouts when they screw up. If they want government protection they should pay their fair share for it.
I also think Andrew's point about the failure of greed to self-regulate is spot-on. If the greedy clowns on Wall Street cannot regulate themselves and their failure to do so results in harm to the rest of us, then I think the government has an obligation to regulate them.
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Two things
another poster asked "what regulation did you have in mind?"
Two things:
1) Had the Fed exercised a lot more restraint in the wake of the dot-com bubble, and 9/11, we would not have had so much cheap money flooding our financial system. Interest rates did NOT have to go so low. It was a terrible error to make money so cheap. Greenspan should have been smart enough to see that.
Even at the time, more than a few people who were in a position to know, knew that both the bubble, and after-effects of 9-11, were temporary phenomena. Real estate values were on a slow, steady, stable march upward in 2000 and 2001--long before 9/11--after a long season of flat values. This slow increase in values around the country was healthy, and could have continued to the present day, as a slow, steady rise, had not cheap money super-charged real estate markets and, basically, destroyed them.
2) all that cheap money was begging for a place to go, and largely unregulated mortgage lenders knew just where to put it: in the hands of unqualified buyers who would pay outrageous interest rates after a short teaser-rate period...but real estate would continue to increase in value, so no problem.
What regulation? Simple: don't increase the money supply so dramatically in 2001 and 2002, and don't throw out all standards for lending money to home-buyers.
You take those two steps, and we're not in this mess. And none of this is hindsight. Plenty of us had deep misgivings about this situation long before it showed signs of blowing up in our faces.
It's not freakin' rocket-science. It's not even complicated economics. It's a con-game, and all taxpayers are the marks.
And if someone can't see that, they're either in on the con, or not paying attention.
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Greenspan the crook!
I have been saying for a long time that Greenspan is a crook. He belongs behind bars for the rest of his miserable life. Unfortunately he will probably die a comfortable and wealthy death. The rest of us will be left to pick through the rubble of his shell games. Edward Gramlich publically warned Greenspan about what would happen. But the tax cuts for the rich and the war in Iraq needed to be funded and the Republican project to take over America needed to be financed so we got the housing bubble.
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Agricultural societies that ate the seed corn in a lean winter..
Created a great deal of misery for themselves.
There is no more seed corn.
We don't even have the excuse of a lean winter.. We are burning the seed corn to kill people and destroy societies on the other side of the world who have never done anything to harm us.
As someone with grandchildren I intend to let them know as soon as they are able to understand that I opposed this madness from before it ever began.
I do not wish my grandchildren to curse my memory when I'm gone.
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The Bush-Greenspan Failure
When Alan Greenspan recently wrote his memoirs, critics could hardly fail to notice that the president on whom he lavished the greatest praise was William Jefferson Clinton – and yet, he was an ardent enabler of Bush's corrupt and disastrous economic policies. When Bush pushed through tax cuts that ballooned the Federal deficit while providing scarcely any economic stimulus because they went almost entirely to Bush's wealthy friends, Greenspan and the Fed stepped in and set in motion the financial crisis that is brewing today. An already heated housing market was ramped into the stratosphere by money so cheap it could be had for less than the inflation rate. The stimulus worked in a fashion, but even at its peak in 2006, the Bush growth came without any growth in the net worth of the median American family - and that was before the collapse of the housing bubble. Stock prices have performed their worst since the 1968-1980 doldrums. US wealth has been pissed away in the sands of Iraq and in an incredible orgy of corporate giveaways.
Bush and Greenspan obliterated Clinton's most important achievement - fiscal sanity and strength - in service of supply-side ideology that failed in the eighties and has failed again. Shame on both of them.