JohnSrinivassan
asked on
Reason for this recession
Hi,
What is root cause of this global recession?
Who is to be blamed?
What is root cause of this global recession?
Who is to be blamed?
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Villa:
I disagree that the root cause was "short and simple", and directed at sub-prime lending. And I strongly disagree with you laying this at Clinton's doorstep.
Who was the President who wanted to encourage an "ownership society", a main component of which was home ownership over apartment renting? Oh yeah, that was our favorite Bush-ie: Dubya.
But these are just distractions - the problem should not be made into political hay. All sides were hobbled by ignorance, conflicted by self-interest, and paralyzed with cowardice.
Which is why I also cannot agree with Graphixer when he says "everyone had the best of intentions" - some did, and some clearly did not (i.e. predatory lending practices, fraudulent loan applicants, institutions heavily investing in CDS because VaR did not measure their risk - these people knew what they were doing, and that it was wrong).
Every big problems starts as a small one - a small snowball rolling down the hill. The question is, not every snowball becomes a huge avalanche, so what else is involved? And if that small snowball had been stopped, would those other pressures just have switched to a different snowball?
The very good FactCheck referenced above does leave out another factor that NPR News detailed in its excellent "Giant Pool of Money" stories: that the tens of trillions of dollars of foreign investment money doubled in the last decade, and as the Fed made safe Treasury investment less and less attractive by lower rates, this money went to Wall Street to get a better return.
That kind of pressure can make people do some pretty stupid things - and take some really dumb risks. It could turn any snowball into an avalanche - if it wasn't mortgages, they would have found some other investment instrument to inflate, bundle, "securitize", and oversell - all the while convincing investors that "it's like money in the bank".
I disagree that the root cause was "short and simple", and directed at sub-prime lending. And I strongly disagree with you laying this at Clinton's doorstep.
Who was the President who wanted to encourage an "ownership society", a main component of which was home ownership over apartment renting? Oh yeah, that was our favorite Bush-ie: Dubya.
But these are just distractions - the problem should not be made into political hay. All sides were hobbled by ignorance, conflicted by self-interest, and paralyzed with cowardice.
Which is why I also cannot agree with Graphixer when he says "everyone had the best of intentions" - some did, and some clearly did not (i.e. predatory lending practices, fraudulent loan applicants, institutions heavily investing in CDS because VaR did not measure their risk - these people knew what they were doing, and that it was wrong).
Every big problems starts as a small one - a small snowball rolling down the hill. The question is, not every snowball becomes a huge avalanche, so what else is involved? And if that small snowball had been stopped, would those other pressures just have switched to a different snowball?
The very good FactCheck referenced above does leave out another factor that NPR News detailed in its excellent "Giant Pool of Money" stories: that the tens of trillions of dollars of foreign investment money doubled in the last decade, and as the Fed made safe Treasury investment less and less attractive by lower rates, this money went to Wall Street to get a better return.
That kind of pressure can make people do some pretty stupid things - and take some really dumb risks. It could turn any snowball into an avalanche - if it wasn't mortgages, they would have found some other investment instrument to inflate, bundle, "securitize", and oversell - all the while convincing investors that "it's like money in the bank".
cdbosh, I think you misunderstood what I said. I wasn't pointing singularly at Clinton; I very directly pointed at Obama. He was a small part of the mass that induced the problem. When we speak of the "root," we have to analyze chronologically, not backward. "Ten years ago," as you note, was indeed at Clinton's doorstep; but even before then we made the first massive mistake of fostering the lending of money to those we knew would not pay it. It is the root because the beginning of the downward widening gyre became evident. If we were to analyze backwards, however, we could point to the fact that things were just great 2000-2006, and then we elected a Democratic congress, and then the wheels fell off.
Regardless of any perceptions of when all this happened, Bush's only fault was that he couldn't fix an already bad situation. He was at least successful in slowing the bleeding.
Regardless of any perceptions of when all this happened, Bush's only fault was that he couldn't fix an already bad situation. He was at least successful in slowing the bleeding.
Villa:
You still have it wrong - do some more reading. It was not "just great" from 2000 to 2006 - and then a Democratic-majority congress somehow, magically, made the "wheels fall off" in less than a year.
You are still politicizing it. This was not a Republican v. Democrat thing - you need to move past the 2008 campaign rhetoric and do some more research.
And don't turn a blind-eye to the administration of the last 8 years and think they "couldn't" fix it. Remember, the Republicans controlled the Congress for most of those 8 years, too. Did Bush do anything to persuade the Fed to stop making money so cheap? No. Did they insist that Fannie and Freddie reorganize, Barney Frank be damned? No.
There was a lot they could have done. There was a lot many others could have done. So I reiterate my earlier comment:
"All sides were hobbled by ignorance, conflicted by self-interest, and paralyzed with cowardice."
And your assertion that you were actually indicting Obama rather than Clinton is just ridiculous. More evidence that you are just regurgitating campaign stumping about Obama and ACORN.
You've seen links here to reputable information sources giving causes for the financial calamity - not one blames ACORN. Where are your sources? I mean, other than the McCain campaign...
You still have it wrong - do some more reading. It was not "just great" from 2000 to 2006 - and then a Democratic-majority congress somehow, magically, made the "wheels fall off" in less than a year.
You are still politicizing it. This was not a Republican v. Democrat thing - you need to move past the 2008 campaign rhetoric and do some more research.
And don't turn a blind-eye to the administration of the last 8 years and think they "couldn't" fix it. Remember, the Republicans controlled the Congress for most of those 8 years, too. Did Bush do anything to persuade the Fed to stop making money so cheap? No. Did they insist that Fannie and Freddie reorganize, Barney Frank be damned? No.
There was a lot they could have done. There was a lot many others could have done. So I reiterate my earlier comment:
"All sides were hobbled by ignorance, conflicted by self-interest, and paralyzed with cowardice."
And your assertion that you were actually indicting Obama rather than Clinton is just ridiculous. More evidence that you are just regurgitating campaign stumping about Obama and ACORN.
You've seen links here to reputable information sources giving causes for the financial calamity - not one blames ACORN. Where are your sources? I mean, other than the McCain campaign...
ASKER
Thanks for your input.