Posted on 2/10/2009, 6:11:53 AM by Fred
Many are calling for a 9/11-type commission to investigate the financial crisis. Any such investigation should not rule out government itself as a major culprit. My research shows that government actions and interventions -- not any inherent failure or instability of the private economy -- caused, prolonged and dramatically worsened the crisis.
The classic explanation of financial crises is that they are caused by excesses -- frequently monetary excesses -- which lead to a boom and an inevitable bust. This crisis was no different: A housing boom followed by a bust led to defaults, the implosion of mortgages and mortgage-related securities at financial institutions, and resulting financial turmoil.
Monetary excesses were the main cause of the boom. The Fed held its target interest rate, especially in 2003-2005, well below known monetary guidelines that say what good policy should be based on historical experience. Keeping interest rates on the track that worked well in the past two decades, rather than keeping rates so low, would have prevented the boom and the bust. Researchers at the Organization for Economic Cooperation and Development have provided corroborating evidence from other countries: The greater the degree of monetary excess in a country, the larger was the housing boom.
The effects of the boom and bust were amplified by several complicating factors including the use of subprime and adjustable-rate mortgages, which led to excessive risk taking. There is also evidence the excessive risk taking was encouraged by the excessively low interest rates. Delinquency rates and foreclosure rates are inversely related to housing price inflation. These rates declined rapidly during the years housing prices rose rapidly, likely throwing mortgage underwriting programs off track and misleading many people.
(Excerpt) Read more at online.wsj.com ...
democrats caused the problem
this information should have been known by everyone that voted in the last election before they reelected the people that caused the problem and now look to them to fix it
Bump
Let me guess:
A 9-11 type commission on the financial crisis wouldn’t be complete if it didn’t have a fraud like Jamie Gorelick on it.
And the former heads (and advisors to “The One”) of Fannie and Freddie.
“THE most important message democrats caused the problem”
Uh huh....Here’s Bush’s speech pushing liar loans to millions of unqualified minorities and illegal aliens.
http://www.youtube.com/watch?v=eW9viaJatpo
was cumo in there?
Did you also miss the part where Bush was twisting arms, urging everyone to sign off on the bail out before the end of his presidency, all in an effort to bail out the same crooks and banksters that pushed these loans BS loans?
Dem's will never allow such investigation and that should tell you all you need to know about this crisis.
ping
It is political intervention that stretches the recovery period as in the Roosevelt debacle 1932-40.
Mark for later read.
bfl
It's going to take a long time for us to pay for the sins of Bush and the Republican-controlled Congress. We saw the damage that was being done but lacked the will, or the way, to hold their feet to the fire every time they abandoned good ol’ conservative principles. We did a jam up and jelly tight job of convincing a lot of people that we should be in charge. They listened to us, believed us and gave us exactly what we asked for. And how did we express our appreciation? By becoming exactly the same creature we told them we would drive out of Washington.
It's the old fool me once, shame on you, fool me twice, shame on me. We are going to have EARN back the trust of the people. And that's going to take a lot of hard work. And it will never happen until we go back to what Reagan proved works and works well.
As Dave Ramsey says, we are simply paying a stupid tax right now.
” Let me guess:
A 9-11 type commission on the financial crisis wouldn’t be complete if it didn’t have a fraud like Jamie Gorelick on it. “
...I give you the Financial Crisis Lynch Mob Chairman...
Barney FranklymydearIdon’tgiveadamnwhatIdidthey’llkeepmeinofficeforlife.
From Bush’s mouth:
“If you put your mind to it, the first time home buyer, the low income home buyer, (with bad credit ta-boot!) can have just a nice home as anybody else.”
You just can’t make this stuff up.
So, Mr. President, when you “put your mind to it,” to give low income, bad credit folks, “as nice a home as anyone else,” well, how did YOUR scheme work out for the nation as a whole?
“If you put your mind to it, the first time home buyer, the low income home buyer, (with bad credit ta-boot!) can have just a nice home as anybody else.”
You just can’t make this stuff up.
Scary part is, there are still a few ignorant that are defending this guy...They bought into all the BS.
The puppet in chief torches what's left of the Republican party then party insiders run an old career liberal socialist, at a time when the strongest, no nonsense leadership was most needed. The whole thing makes me sick...
The current puppet in chief picks up the torch and is now is trying to convince the ignorant slack jawed voters that only government can fix the disaster that government created themselves. It's so f'd up, they got illegal aliens fleeing the country.
Is the country salvageable at this point? I'm not confident.
I honestly wonder, if the SHTF good, if the military would support this government in it's march towards total control, or turn around and simply seize control and prosecute these traitors of freedom.
I'd almost bet, somewhere behind closed doors, this is being considered.
What a truly sad state of affairs.
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