>>>>>>>>>>>http://www.guardian.co.uk/commentisfree/cifamerica/2010/sep/28/us-foreclosure-fiasco-banks
>>>>>>>>>>>
>>>>>>>>>>>I really wish all the bail out money had gone to business and not to banks. This is true in the UK as well as the US. In a free market badly run businesses should fail.
>>>>>>>>>>
>>>>>>>>>>In general I agree with you. In 2008 I believe the "too big to fail" argument was correct. Given the interconnectedness between incredibly large financial institutions, there could easily have been a domino effect. To me the remedy is what Paul Volcker (former U.S. chairman of the Fed.) advocated -- don't allow banks to engage in risky investment activity. Presumably insurers like AIG would fall in the same category. We need some rocks we can count on. If the Lehmans and Goldman Sachs of the world want to lose their a**es on wild investments, let them. And they take full responsibility for the results, good or bad.
>>>>>>>>>>
>>>>>>>>>>Bankers being bankers, which is to say lizards, they successfully watered down the financial reform bill and continue to work on watering down the rest. Even after what happened two years ago they want it to be business as usual.
>>>>>>>>>
>>>>>>>>>But it is not business as usual. Banks have gone back to requiring security, credit, etc for loans. Before Clinton and Bush, either an excellent credit history or a 20% down payment plus at least adequate credit was a requirement for a loan. They've gone back to that practice so it appears that money isn't flowing, but it is just flowing only to those they consider 'worth the risk.'
>>>>>>>>>
>>>>>>>>>The same holds true for investments. They are not investing in risky enterprises any longer either (except for a few exceptions). So by appearances, money is not flowing like it was during the last two presidential terms. Add to that those who are no longer spending on credit like they were before (possibly living within their means for a change?) out of fear and money is just sitting....
>>>>>>>>
>>>>>>>>None of these are bad things. For the most part people and businesses are back to acting rationally, which is good. The tricky part is that at a macro level it's horrible for the economy to not have money flowing. I wish I knew what would get it humming again. We all know what it took to end the Great Depression, and I am certainly not hoping for that.
>>>>>>>
>>>>>>>We all know, huh? I assume you're referring to the New Deal that expanded the Great Depression?
>>>>>>
>>>>>>No. The New Deal did not end the Great Depression. FDR tried everything he could think of and we were still in its grip, if marginally better off than at its worst. Then a wonderful thing happened. Pearl Harbor was bombed. We entered WW II, factories cranked up to support the war effort, everyone who wasn't off fighting was back to work, and the economy was off to the races.
>>>>>
>>>>>Actually Mike the factories where already cranked up supplying us in exchange for all our money.
>>>>
>>>>Agreed. that is the simplistic view. An interesting one here:
>>>>
>>>>http://www.thefreemanonline.org/columns/what-ended-the-great-depression/#
>>>
>>>I will read the link.
>>>
>>>FWIW the first time I heard that theory was from an econ professor I had in college named Joel Mokyr. (I see he is still there -- http://faculty.wcas.northwestern.edu/~jmokyr/). The line about "Then a wonderful thing happened" was stolen directly from him. Why don't you email him and tell him his history is simplistic?
>>
>>I'm sure he is already aware of it. :o) Not necessary anyway as he was not my teacher. Most likely he took the simplistic view in order to teach the lesson.
>
>Puff, puff, puff -- be careful your head doesn't explode! LOL
>
>As much as I would love to keep going back and forth like this (eyeroll), I am off to a volleyball match. Have a good evening.

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