|
|
Post by fatmenace on Feb 19, 2009 14:48:27 GMT -6
|
|
|
|
Post by gk on Feb 19, 2009 15:54:07 GMT -6
Not wanting to spend the money - since my 401K consists of a few paperclips and a piece of lint - can you summarize his "Free Market" explanation of why the economy collapsed?
|
|
|
|
Post by fatmenace on Feb 19, 2009 16:48:26 GMT -6
I'll be finishing it up tonight, I'll post on it tomorrow.
|
|
|
|
Post by fatmenace on Feb 23, 2009 18:59:06 GMT -6
At its core, it's refuting the idea that deregulation was responsible for the financial crisis, and instead shows that the banks and lenders were doing exactly what the government wanted them to do. It attacks the Keynesian economics, especially Krugman. It shows historically how the markets, when the government does not interfere, correct themselves quickly and bring prosperity.
He spends a lot of time dismantling W and Paulson and Bernanke and showing how they have destroyed the economy. Dems shouldn't breathe easy however, since the people they brought on have the same view as the people that just left. The idea that's there's change we can believe in is pretty much tossed through the shredder.
You can get much better reviews from the amazon link, since I've always hated doing book reports.
It can be summed up like this: The government should have let the businesses fail. That would have allowed the healthy businesses to survive and pick up the useful assets. However, now we have allowed moral hazard, since all the big companies now know they're "too big to fail". It examines historical depressions in the US and Japan and shows how economic stimulus packages have always prolonged the recovery. I think it's a must read. Even though it's written by a guy who definitely leans towards R (he may be a Libertarian) he spends most of the book criticizing W's administration (although FDR is taken to task too), so Dems can feel better reading it.
It gives a pretty good primer on the Federal Reserve and how money works, for those that may not know it. It will end up being prophetic, because we're heading towards a massive crash in 2009.
|
|
|
|
Post by gk on Feb 23, 2009 21:19:08 GMT -6
Hate to argue with a book I haven't read, and I'm sure it has valid criticisms of the government involvement in Freddy & Fanny ... but... As much as economists disagree about what we should do going forward, I think 99% of them would say that the banks cannot have been allowed to fail. When Lehman Brothers went down, it caused a ripple across the economy, and Lehman was relatively small compared to some of the other banks with toxic assets. Every economist I've read - and granted I haven't read a ton - conservative and liberal, pretty much agree on that: that had the banking system collapsed, as it surely would have without government help, we'd be in much worse shape than we are now. I don't know anything about macroeconomics, but that seems to be what everyone in the know agree upon. They disagree on everything else. So I'll give them the bank -saving, in all of it's ugliness and moral hazard. Other businesses, especially the car companies, do need to die and decompose, so something better can grow in their place. Thomas Friedman talks about the "Open Door Bailout" in which we open up the borders and drop the restrictive trade walls that allows innovators to come in and create new enterprises. Also, an immigration boom would partially solve the foreclosure, and falling home prices problem (he notes the default rate of Indian and Asian mortgages is near zero). It's a great article. I've pretty much been nodding my head at everything Friedman's written over the economy recently. I'm not sure we can look to Japan's "Lost Decade" or the Great Depression for data points. Those examples seem so different than what we're about to go through it's tough to draw any definitive conclusion. Also people look to those eras and declare different lessons to be learned. For liberals, those instances proved that the government should have spent more. For conservatives, it proved that nothing should have been done. The point is: we don't really know. And anyone who says they do is lying. And the stimulus, with all it's warts and scandals to come, and all the criticism it will generate and deservedly so, is probably (PROBABLY) better than doing nothing at all and having one huge blood letting. I agree with most republicans that much of the stuff in there probably isn't stimulative and probably should be more targeted. I would have preferred the stimulus focused almost exclusively on infrastructure, green technology, health care and education. But we all know that that's not how things work. That's the curse of the democracy we live in. |
|
|
|
Post by gk on Feb 23, 2009 21:19:49 GMT -6
By the way, that Friedman article is hyperlinked but you can't tell in this color scheme. C'mon moderator!.
|
|
|
|
Post by fatmenace on Feb 26, 2009 18:53:51 GMT -6
Right, we saved the banks because they're "too big to fail." Now they know that we will ALWAYS bail them out. There's no consequence for their behavior.
|
|
|
|
Post by fatmenace on Feb 26, 2009 18:56:39 GMT -6
Here's Ron Paul asking Bernanke today what it would take to admit he was wrong. Awesome.
|
|
|
|
Post by gk on Feb 26, 2009 23:22:04 GMT -6
Right, we saved the banks because they're "too big to fail." Now they know that we will ALWAYS bail them out. There's no consequence for their behavior. I don't know. I understand the point and all. But for some reason I don't forsee a lot of banks going the same route again, going heavily into all these derivatives and securities. Maybe they will, but I don't think so. And if they do, hopefully someone will blow the whistle a bit sooner. To me, the most telling thing about saving the banks is that Ben Bernanke and Henry Paulson said we had to save them. People are acting like these guys are Marxists. These two were the free-market-ers of the free-market-ers. And they saw the data, and they shit their pants and said, we better do something before the world economy plunges. Like I said, no one really knows anything conclusively, but the mere fact that these two previously mass-deregulators / deliriously pro-free marketers adopted this position is telling in and of itself. |
|
|
|
Post by andyroosky on Feb 27, 2009 17:34:08 GMT -6
I love the quote describing the spending bill which is avoiding bankruptcy and shifting from the free market...."Capitalism without bankruptcy is like religion without Hell"
|
|
|
|
Post by fatmenace on Feb 27, 2009 17:42:07 GMT -6
I hear you, but again, saying "hopefully" they'll behave this time isn't exactly reassuring.
I do find it funny however that dems keep blaming Republican "deregulation" for this mess, when in the 80s and 90s it was Republicans that were demanding stricter regulation on Fannie and Freddie, but it was the Congressional dems that said no. The New York Times chronicled how the dems (and Rs) feared that tighter regulation of the companies (Freddie and Fannie) could sharply reduce their committment to financing low income and affordable housing.
And of course, there's this gem by Barney Frank in September of 2003 when he said that Fannie and Freddie "were not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." He asserted that position multiple times in multiple interviews.
That being said, Rs were in charge 20 of the last 28 years, so most of the blame could (should) fall on them, but this economic crisis goes a little deeper than deregulation.
|
|
|
|
Post by fatmenace on Feb 27, 2009 17:50:38 GMT -6
My point is that in regards to the housing market, the lenders were doing exactly what the federal government and its central bank wanted them to do. Woods says "saying that more government oversight was needed misses the point. More and riskier loans are what the government wanted."
What regulator was going to stand up the the government?
|
|
|
|
Post by gk on Feb 27, 2009 19:07:31 GMT -6
My point is that in regards to the housing market, the lenders were doing exactly what the federal government and its central bank wanted them to do. Woods says "saying that more government oversight was needed misses the point. More and riskier loans are what the government wanted." What regulator was going to stand up the the government? There's no question about this. |
|
