Here’s the list of 10 things wrong with the economy. Read the article for details on each.
What’s the line from Battlestar Galactica (and Peter Pan, oddly enough): “All of this has happened before and will happen again.”
1. We are learning the wrong lessons from the last one.
2. No one has been punished.
3. The incentives remain crooked.
4. The referees are corrupt.
5. Stocks are skyrocketing again.
6. The derivatives time bomb is bigger than ever — and ticking away.
7. The ancient regime is in the saddle.
8. Ben Bernanke doesn’t understand his job.
9. We are levering up like crazy.
10. The real economy remains in the tank.
At this point, I’d trust the capuchin monkeys who were taught how to use money over any politician or government official of any party. At least they made no pretense about really caring about anything other than getting what they could for themselves and to hell with everyone else.
#30, Since you were interested:
Essentially the entire interstate ng pipeline and wholesale market had become vertically integrated and restricted from competition through the regulatory systems that developed over previous decades. Companies had to enter into long-term contracts at regulator fixed prices, which ended up being well above market prices. Consumers started finding alternative sources and many of the interstate pipelines (which had been protected but tightly controlled by federal regulators) nearly went bankrupt. The eventual restructuring involved gradually deregulating the heavily controlled, non-competitive system for a more market-driven one.
My summary is pretty lacking I’m sure, so here is a link to a paper discussing it:
http://dl.dropbox.com/u/19165619/WholesaleGas.pdf
Thanks SL. I’ll read the link later but your summary is sufficient for me to link back to what I said above: bad, lazy, inefficient, nanny state regulators certainly exist “BUT” in general they don’t have the active intent to defraud the public for their own personal fraudulent gain. The “free market/private competition” model may provide gains from time to time but they also open the enterprise up to massive society changing collapse.
Seems to me that lazy inefficient government regulation is “kind of” an insurance policy against rampant fraud. Like all insurance, its a waste of money until the insured against event occurs==and when dealing with regulatory schemes regarding pricing and distributions, those insured against events never arise making the insurance of inept regulatory schemes look even more inefficient/bad policy approach.
But are they?
I assume similar in approach is to look at the privatization of the water supply in South America? Yes, the government was so inefficient. But private market “efficiencies” have driven the cost of public water up beyond the ability of 25% of the poor public to even quench their thirst. Good overall policy – or not.
Case by case.
The outrage in Illinois (?–Ohio?) re selling the turnpikes to private enterprise with a guarantee of profit to be made for the next 100 years. Result: tolls going up by double digit increases and additional roads to ease the load not allowed.
Everything has its place. Short term vs Long Term. The purpose of Government is to provide a service. The purpose of business is to make money. Lots of cross purposes.
Thanks for the link. I’ll read it with interest.
I’d have to read the link more than 2-3 times to get its full import. My quick read reveals that the regulations were allowing the tyranny of a state/regulatory imposed monopoly and allowing price competition thru changing the regulations has proven to be a good thing.
Fair enough. The article uses the term changes to regulation more than it does deregulation but the industry was not deregulated in the board sense, only certain narrow regulations were removed/changed/deregulated.
Words.
“bad, lazy, inefficient, nanny state regulators certainly exist “BUT” in general they don’t have the active intent to defraud the public for their own personal fraudulent gain.”
Funny you mention that. There is actually an entire area within economics called Public Choice that analyses how public officials demonstrate self-interested behavior in how they respond to economic incentives.
#35–there is also the interesting case in California of some local government district passing rules that gave them millions in salary and retirement==all fraudulent and self dealing. They are being looked at for criminal prosecution as they should be but that government protection is a tough nut to crack.
It is interesting how they avoided the current regulatory scheme such as “No employee can be paid more than $10K per pay period.” so these scumbags made a rule that their pay period was every 4 days instead of every two weeks. Good stuff like that==all in closed session and depending on how it was reported–everything looking like it was on the up and up consistent with existing rules.
I wonder how many Pukes today would still not allow tax increases “if they knew” it would bankrupt America? You know: some values are just worth the pain. Do you think they are that dedicated to their mission? Saving America? How do you save America when you sacrifice 99% for the benefit of 1%.
Some things are just plain obvious.
And still we leave Sarbanes-Oxley in place. Aren’t we tracking the wrong crooks?
This article is absolutely right.
I almost didn’t finish reading that article since in point #1 he uses some rather fallacious logic to exonerate Barney Frank. For God’s sake! Why would any sane or decent person want to do that?
He could have properly mentioned Frank under point #4. and actually, it’s a bit bizarre that he didn’t.
http://foro.univision.com/t5/Dem%C3%B3cratas/Barney-Frank-s-Homosexual-Lover-Herb-Moses-Was-a-Senior/td-p/288192498
I’m going to go with the better observers in this case. The American people reelected the most egregious malefactors and gave them the job of cleaning up the mess they made. (Thanks Massachusetts!)
We can be sure they did a good job this time.
My over-all take: article bears out Sturgeon’s law.
Somebody==well, how do you explain the housing booms in those countries while Barney was in the minority party in Congress?
Thats not “proof” he didn’t play a role, but whats the proof he did?—–minority party members normally aren’t held responsible for what happens under Majority control.
Why should Barney be singled out for inclusion in Point #4 when all the congress creeps do it. What do you want==a list of 535 people?
The financial crises was sparked by housing which the Fannies had a role in but the crises was caused by unregulated debt swap instruments/their collapse/and bailout.
The point that Barney is not as liable as the crooks more directly culpable seems to stand up to me unless you’ve got more facts than mere disagreement with the point made.
Everyone disses those who signed bad mortgages without thinking of the ratscuzz bankers that created the bad terms and iterally lied to people about the real costs and ramifications. Sure, Caveat Emptor, but the evil lying greedy bankers who tricked the people now forclosed are as guilty.
Yes, banks were pushing those ARM loans hard to everyone looking to buy a house. It was a good scam – sell people a loan they can’t afford, let them pay several years of payments, jack up the interest rate, foreclose, flip the property. It was win-win for the banks until the shit hit the fan and the housing market crashed.
I call it the no recovery, recovery. Has not gotten worse, but has not significantly improved. Its just in limbo. My big surprise is how little Congress or our President talk about the economy anymore. I guess when you don’t have any ideals you just ignore it. No sense focusing on a negative so close to election year.
I do have to wonder how its going in two different parallel universes:
No 2==Let all the banks fail and go thru normal bankruptcy proceedings with “bailout” and support money reserved for whatever was left over and the credit/banking/cash requirements therefrom. At the time, I thought the many local community banks and S&L’s would have provided all the “normal” banking/credit requirements of our society. Hard to see how that was not a winner right from the beginning.
No 3==Do what we did but leaving out the pork and the tax cuts with STRONG prosecution and reregulation.
I wonder which universe would be better off? And the sad fact is: no one can tell because no one understands economics well enough. Its a chaotic system. If it were “predictable” it would be captured by some secret group all to the greater ill of society. Bits and pieces and short term limited effects are understood–enough to skim profits in a system organized to allow such: IE==computerized trading in bulk in nanoseconds of cents per trade IS NOT PLAYING THE STOCK MARKET. It is skimming. A wealth transfer to the rich.
Some things are observable.
#46 pedro
Your argument is not in line with my experience. Banks were pushing the ARMs. I spent a lot of time talking to a loan officer about an ARM mortgage before he’d even admit there were other options. I bet others got pushed to ARMs who would have been served better by other loans too.
There may have been political will for more home ownership, but it was the banks pushing the ARM scam. And they were happy to do it until the market collapsed, turning their scam from an asset to a huge liability.
#41 “fallacious logic” I think with Mr. Frank its called fellacious logic
This now popular Self-Help, positive attitude exhortation of “Looking ahead and not looking back” shows poor discipline and is not at all guiding and teaching.
It’s thinking like this that is killing our country.
Pretty sad really but that’s life I guess. But then, we have people like you guys here at DU and other forums and I’m not a bit surprise.
Pedro,
So you support financial regulation?