>>The only thing I don't understand in this is how Bush is responsible for the housing burst but Clinton was not responsible for the dotcom debaucle? Hmmmmmm....
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>>I guess it depends on who you ask :o)
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>I think it's Reagan who put the both into motion, by pushing the Soviet Union over the edge. Reagan being only the figurehead here - it's the whole backlash against the freedoms achieved in the sixties (anything-lib is dangerous) and the social structure built from the New Deal on.
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>With the Red Threat off the stage, there was really no need to prove to anyone anymore that capitalism is good for the people too. So the breaks were gradually pulled. Clinton pulled some, but GW2B pulled the remaining ones and we're back in pretty much the lessez-faire capitalism of the robber barons.
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>Both bursts were due to the pressure of the money wanting to multiply rapidly. Dot com boom attracted far too many investors who wanted to be the next Netscape but had no idea how. It was not the technology that failed, it was the same old con men who weren't in IT for the long run - only wanted to make a quick million bucks on investors, not on the market.
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>Same with the housing bubble - it was investors, with their money counting finger itching. They created new financial instrument (securitized mortgages - wow, what a product, does it have an instruction manual, EULA etc?) just to be able to emit more money. The old limitation on how much loan can a bank extend was circumvented in many ways - which is why 1% change of something was enough to bring down Bear-Sterns (sp? - I don't care).
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>And how was all this possible? Simple, the New Deal and all of that regulation was there to prevent the bubble-burst-crisis-bubble cycle which is inherent to unregulated capitalism. Now since the 80s they insist on deregulation - and we're pushed back 70 years.
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>It could well be 1984 and 1929 rolled into one.

If only it were 1917 again, eh, comrade? <g>

You're certainly right about some of the wacky new financial instruments. Even Robert Rubin, the former Secretary of the Treasury and before that head of one of the investment houses, said he doesn't fully understand them.