Why not lynch the borrowers?

[1sttruck]

'.....you can believe what you want. Like your belief that the "free market" caused this! '

Something you seem to be missing is that 'free market' as preached in the US essentially means a large dose of deregulation, something even Greenspan admits was an error. See below for parts of a previous post on Greenspan. We seem to be entering another twilight zone, where people keep supporting a stance after it has been discredited by it's primary promoters, not unlike Stockman admitting that 'supply side' was just a facade of tax cuts for the rich.



.....But on Thursday, almost three years after stepping down as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.

.... “Do you feel that your ideology pushed you to make decisions that you wish you had not made?”

Mr. Greenspan conceded: “Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.”

On a day that brought more bad news about rising home foreclosures and slumping employment, Mr. Greenspan refused to accept blame for the crisis but acknowledged that his belief in deregulation had been shaken.

 

[Drew99GT]

I'd take anything Alan Greenspan says with a grain of salt. The guy has been and will always be all over the map.

 

[Gary Allan]

Originally Posted By: tonycarguy
The free market is not bad. People are forgetting that, the free market is what gave us the booming economy in 2002-2006 and along with it, the millions of jobs in contruction, real estate, banking, lending, retail, etc. People complain now that many of these jobs are disappearing, but if not for the free market these jobs never would have existed to begin with!

If the industry were more regulated years ago, we wouldn't be shedding jobs now because there wouldn't be all these jobs to shed (because we wouldn't have experienced the housing boom).




Well, I think I'll restate that. We're "out of phase". Our timing is advanced. That is, we just spent 25 years of sustainable economy (however pathetic or weak that may have been) and compressed it into the earnings and consumption of about 7-8 years.

We now owe the bill for the life we lived almost a decade ago.

So, essentially, the "Free Market" took tomorrows vitality (however weak or pathetic that may have been) and spent it yesterday.

Free market sure has shown me it's shinny side

 

[oilyriser]

Blame lies with the people who were in charge of voluntary followers, or who took charge of things with the aid of force.

 

[Shannow]

Originally Posted By: Gary Allan
So, essentially, the "Free Market" took tomorrows vitality (however weak or pathetic that may have been) and spent it yesterday.


Another ponzi scheme ?

 

[MarkC]

Blame lies with everyone involved, but one must also considered who prospered from this.

 

[Gary Allan]

Originally Posted By: Shannow
Originally Posted By: Gary Allan
So, essentially, the "Free Market" took tomorrows vitality (however weak or pathetic that may have been) and spent it yesterday.


Another ponzi scheme ?


That's been the only way to "harvest wealth" in the past 20 years. You don't really earn it, you merely corral enough of the herd into the newest economic fad ..and then close the gate after you've exited.

 

[PandaBear]

Originally Posted By: Gary Allan


That's been the only way to "harvest wealth" in the past 20 years. You don't really earn it, you merely corral enough of the herd into the newest economic fad ..and then close the gate after you've exited.


Or ask the exporting nations to lend us money, and then inflation kicks in to scam them of their hard earn export money.

 

[tonycarguy]

The unregulated, free-markets tend to give us these intense boom-bust cycles. In the roaring 20s, the stock market was highly unregulated and people were margined to the hilt, which helped produced a decade of prosperity (followed by a decade of despair). In a loose, unregulated economy, the two most powerful emotions control things: greed rules first, then fear takes over. Greenspan is right in the sense that the free market would eventually "fix" things if we let it, but the problem is the public and government don't want to do so because the free market's way of fixing things is painful. The gov wants to keep this asset bubble inflated as long as possible because it's somehow a good thing.

The money supply has been growing massively this year. This is how Bernake intends to resolve this crisis -- inflate.

 

[Pablo]

I'm still looking for "unregulated, free-markets". Anyone have an example?

 

[Gary Allan]

Nope. They're all manipulated ..and all have their side effects that always occur. As long as you don't mind recessions, I think you can just go straight up. The problem is that the globe requires way too much credit to function. Attempt to tighten credit and too many whine. I say, let them whine until they learn to behave. If they don't ..keep whining and live with the quench and purge way of life.

 

[oilyriser]

Credit is created when you pay for something and wait for it too arrive, or when someone brings you something hoping to get paid when he arrives. No banks or corporations are needed to run things, but they allow better economy of scale, and cheaper transactions, when they behave.

 

[1sttruck]

I'm still looking for a market run by free market advocates that doesn't result in trillion dollar taxpayer bailouts in the US, and an impact so large on the global economy that governments around the world are also putting out trillions to prop up their banks, and will conduct the most significant global financial meeting since WWII. Let's call it 'bankrupt dogma', or 'that which results in gloabl financial catastrophe'.

 

[Gary Allan]

We're not poor enough yet. That's why these things occur. Well, check that. We are poor enough now. We just don't know it yet.

 

[Drew99GT]

Originally Posted By: oilyriser
No banks or corporations are needed to run things, but they allow better economy of scale, and cheaper transactions, when they behave.


That's like saying Grizzly Bears are such nice cuddly buggers "when they behave"!

I'm guessing Grizzly Man is no longer a believer in unregulated free markets... (while he's sitting somewhere up in the sky of course).

 

[Steve S]

lets think about this now.....................follow the money

 

[oilyriser]

People have forgotten why free markets are better than centrally planned markets. I guess it's time to start learning Intelligent Design.

 

[PandaBear]

Originally Posted By: oilyriser
People have forgotten why free markets are better than centrally planned markets. I guess it's time to start learning Intelligent Design.


You have to avoid extremes on either end (totally unregulated 1920s, and the soviet communist system), maybe we should have an intelligent evolution instead.

 

[oilyriser]

Honesty has to be enforced, so buyers can make informed decisions. If you call something beef, it can't be injected with salt water without putting that on the label, eg., US Wal-Mart meat I bought a few weeks ago, that smelled like liver and tasted like salted leather. Contracts between buyer and seller have to be simple, so both parties can understand them.

 

[My442]

Incentives and motives drive behavior, especially for greed.

All the folks involved in the sub prime mess knew exactly what they were doing.

The sadder part is the regulators who were supposed to watch this sector looked the other way.

THAT is the real crime.