>Yet the truth is that the source of the crisis was not private free markets, but markets tainted by mistaken government policies designed to satisfy special interest groups.<
Isn’t that the truth! I’m shocked that a journalist would get it correct in this day and age.
The reason both parties blame the markets is the CRA bill that Clinton signed in 1999 was passed by the Republican controlled congress and I am willing to bet that McCain voted FOR that POS.
“Before credibility can return to financial markets, however, there must be a restoration of confidence in government as the protector and guarantor of our economic liberties.”
Not happening........in my lifetime.
The US automakers have gotten fat, dumb and happy. Similar to the current housing bubble and the previous e-commerce boom and bust, valuations were inflated and now we are experiencing a correction — meaning that prices are being adjusted to actual value rather than perceived value.
If we want to rescue the US economy, what we must do is abolish taxes on income, savings and investment. Then replace them with consumption taxes. That will eliminate the liquidity problem and the economy will take off like a rocket. Don’t expect that to happen under Obama’s promised National Socialist agenda.
Companies with inflated labor costs like the auto industry will adjust or be replaced. Let us not forget that foreign-designed cars are being made in the US. If the demand for cars is the same, these union-contract jobs will be replaced with ones that pay wages that are competitive in the world market. Quite unlike they are today.
The attack on free markets occurs when central banks incorrectly blame economic growth for inflation, and invert their yield curves in order to stop economic growth, but nobody ever complains about that. The only time people complain is when the government tries to step in to clean up its own mess.
Correct me if I am wrong, government can only do one thing, take wealth from some people to give to another, through taxes, spending and printing. The idea is that federal government knows what’s best for the greater number of people.
They cant really just make money and give it away (beyond above), but right now we are being told that deflation allows the feds to get money for free, printing during deflation.
bookmark bump
That’s a nice attempt to whitewash investment banking’s role in the whole fiasco. Their enthusiasm for subprime paper exceeded the wildest imaginations of the do-gooders who were promoting the CRA. Wall Street couldn’t get enough of that garbage paper to repackage and sell to suckers all across the globe, so they were extending credit lines to the thousands of subprime storefront lenders popping up all over the country.
If we still had the Glass-Steagall Act in force then we wouldn’t have had investment banks crowding into the mortgage market and fueling the toxic loans that exploded with spectacular effect.