Somehow I got signed up for this conservative "news" list serve that sends out daily emails. It goes straight to junk mail, of course, but in the process of deleting the old garbage I noticed that one newsletter was commenting that, just two months into office, "Obama's stimulus" had failed. These guys still think that what we need to get out of this mess is more of the policies that got us into it.
Earth to conservatives! It's going to take a hell of a lot more time than two months for Obama and the Democrats to solve the problems Reagan, the Bushes (especially W) and the Republican congress created. We've had 28 years of lassaize faire, fascist economic policy. It's uncertain whether the economy is even salvageable. We'll probably have to raise taxes on the rich a lot to get out of it. We're also in a new situation, and it'll take a period of trial and error to get it right. However, Obama doesn't appear to be an idealist. Unlike his predecessor, if things don't work, he'll probably try something else.
Meanwhile, fasten your seat belts. There's plenty of turbulence ahead. Turbulence that was visible on the horizon when Reagan was in office, and which you've ignored until now – until avoiding or mitigating it is impossible.
But don't blame Obama for the fallout of Republican policies.
3 comments:
Is it possible that the government is only partially to blame. I mean, you know where I would stand on placing the blame on the government. But isn't dishonesty and failure to take responsibility for our own actions and promises included in the financial failure? I mean, if the people up top of those big companies would have been honest with more figures, things would have been different. And then if so many people had not piled up so much debt that they could not pay off, or bought houses that they could not afford, etc... Would that not have changed things as well?
Seda, as you know so well, it was predatory lending practices, and the use of side bets that we call derivatives, and "credit default swaps," without adequate capital reserves, and no regulations to force sound fiscal management, that got us into this economic meltdown mess to begin with, and made a lot corporate "fat cats," richer and fatter.
What galls me the most is that the execs who contributed to this economic meltdown are still being rewarded through bonuses paid for thanks to the American taxpayer.
Our economy would have probably withstood the foreclosure fiasco, but not the dual exposure that came from all those side bets.
Adequate enforceable, and enforced regulations on derivatives would have prevented the whole mess in the first place.
It was the credit default swaps as insurance that made all those sub-prime mortgages palatable and attractive investment instruments to potential investors.
No investors in their right mind were going to invest in those sub-prime mortgages and with good cause.
And mortgage bankers, et al, needed new fish to fry--they had run out of people to buy mortgages in the numbers they needed to continue to grow and prosper--hence, the exploitation of the only borrowers that hadn't been tapped, that potential marketing base that we've come to know as "sub-prime borrowers."
A lot of people got rich because of this scheme, and they continue to get rich because of it.
Greed has no conscience.
David,
See BD's comment below...
Yeah, dishonesty and lack of responsibility play a big role. Don't blame the subprime borrowers too much, though. A lot of them just did what they had to do to get by. The loans were extended to them by conscienceless mercenary lenders, made possible by deregulation by Republican economic policy.
Greed and dishonesty will always be with us. They will inhabit every administration, and plague this society for as long as it lasts. However, economic policy does not have to enable it, and that's exactly what it's been doing since Reagan took office, and it was accelerated into overdrive during W's term. The subprime fiasco, Enron, etc., etc., were all part of that. My local utility is public, and it is extremely well run, accountable, and efficient - unlike PG&E and the other big private utilities.
The Coolidge and Hoover administrations pulled the same kind of stuff, and the fallout was the Great Depression.
Think about it.
I'm not saying regulation can't be overdone. It can, and it has. But it doesn't have to be.
Deregulation, however, will always open doors for the unscrupulous.
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