3 Reasons The New Financial Regs Won’t Fix Anything
The financial reform bill currently working its way toward President Barack Obama’s desk for signing is being touted as the biggest overhaul of the banking and investment sectors since the Great Depression. But the new regs won’t be any more effective than the ones they replace in fixing anything or preventing the next major panic for at least three reasons. 1. New Watchdog, Old Tricks They create a new watchdog consumer agency designed to protect consumers from their own supposed stupidity. You’ll now be facing fewer choices when it comes to getting credit cards, loans, and other basic financial transactions. 2. Never Too Big To Fail They replace “Too Big to Fail” with… “Too Big to Fail.” One of the reasons why major financial institutions played Russian Roulette with the economy was because they were betting they would get bailed out. Which is precisely what happened. The new rules codify the idea that the government will make sure certain institutions can never fail. And if you think the big boys won’t game that system, then you don’t understand how well Citigroup, Goldman Sachs, et al have come through the current meltdown. 3. Housing Bubble Trouble The financial crisis was set into motion by government policies that encouraged people to buy homes they couldn’t afford at prices that were unsustainable. Between desperate attempts to keep people in houses and to keep interest rates below an effective rate of zero, the government continues to pour more money down the …
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“We now stand on the verge of victory… take us over the finish line”
The Progressives have almost collapsed American in hopes that we will “fundamentally change” into a socialist nation.
From the rubble comes a glorious One World Socialist-Corporatist Order of, by and for the banking elite, their giant corporations and the political class they own and control like puppets.
In a free market businesses need us and have to earn our money with effective products and services.
But that’s too much work.
By limiting our options and mandating our choices “elite” businesses can charge whatever they want for whatever products/services they’re willing to provide.
Result = low quality products and inefficient services at exorbitant prices. Sometimes “purchased” beforehand through mandated fees and taxation with no recourse for non-delivery or non-performance.
@ltkhokie1
The war was the reason other countries needed our products, which is what helped to employ so many people, thus benefiting the economy.
@TheAtheistAllegiance What? How am I wrong? Give me some statistics that prove I’m wrong. I’m sure you wont find any tho. I wasnt saying our fighting in the war brought us out, it was the buildup of nations prior to our entry where they bought many supplies from the U.S. that took us out of the depression.
Sadly, I think this post is 100% true.
@TheAtheistAllegiance FDR ran for the Presidency by promising to govern the opposite of Hoover’s interventionism into the American economy. Yet, he continued Hoover’s policies and doubled-down. Investors stayed on the sideline under FDR’s hostile business climate, war rationing didn’t help either. Read “The Roosevelt Myth” by John T. Flynn. FDR’s devaluation of the dollar by 40% was made possible by illegally stealing citizen’s gold. FDR’s death was the best thing ever to happen to America.
@tkwelge
Prime defaults didn’t start until the collapse of the sub-prime market. There was no rise in defaults until the rapid decline in the US economy, which wouldn’t take much of a lag either way.
Like I said, you’re probably getting bad information. Every one of the hundreds of charts I’ve looked at (including searching for the one you pointed to) have negated what you’re asserting.
@Darkwizzrobe
Germany’s economy followed more closely along the lines of Fascism rather than Socialism.
@TheAtheistAllegiance I think Fear and foreign reparations by the treaty of versailles took over Germany and led many to follow Hitler’s brand of socialism that had more to with WWII than a lack of alternatives
@TheAtheistAllegiance I never said that the total number of defaults was higher in 2003. I said that subprime loans were more likely to default in 2002-2003 than they were in the beginning of the current housing crisis when Prime defaults began to rise in kind.
Prime defaults were rising ever since before the beginning of the official start of the Recession. That was my point.The truth doesn’t follow your narrative of an increase in Subprime defaults followed by a lag, then prime defaults.
@tkwelge
You must be getting bad information. There were approximately 100K total defaults in 2003, and 450K in early 2008 in the state of California. (Nationwide rates similar) 2003 had nearly the lowest number of defaults since the 1993 recession.
Prime mortgages have been increasingly failing over the last few years, which further indicates that prime borrowers are defaulting due to issues with unemployment, low revenue, etc. Prime mortgages weren’t the cause of the housing crisis.
@Darkwizzrobe
Campaign finance reform will solve the dangerous conflict of interest produced the by the Military Industrial Complex. Other than that, what alternative is there?
Germany was taken over by Hitler. Don’t you think that had something to do with WWII?
@tkwelge Sorry, that came out a little difficult. Subprime defaults jumped after 9/11 to a level that was higher than they were in much of 2008 when prime defaults started increasing too. This crisis supposedly began in 2007 and 2008 (supposedly taking off in 2008) and back then subprime defaults were below their 2002-2003 level. Back in 2002-2003 there was no significant increase in prime defaults.
@tkwelge These graphs are surprisingly difficult to find on the internet a second time. Try googling: prime foreclosures greater than subprime and click on the first link. It has a neat little chart. In the first part of 2008, subprime foreclosures were actually declining as prime foreclosures were increasing, and they both started increasing in the same early point. There is another graph on Reason, but i can’t post links here and I can’t find it on google in an easy way.
@tkwelge I’ve already mentioned that if you look at the graphs of foreclosures, subprime and prime defaults began increasing AT THE SAME TIME. There was NO lag between subprime and prime defaults and in both cases the determining factor was whether or not an ARM was involved.
@TheAtheistAllegiance Well, every subprime with an ARM didn’t necessarily default but that is besides the point…
This is a hard point to get across in a comment section, but in this case it is the proportion of the number of defaults that matters and where their source is, not their proportion of their respective markets, because they are part of the SAME market. There were plenty of PRIME loans that were essentially built on shakier grounds than many subprime loans.
@TheAtheistAllegiance Yes, CURRENT sub prime defaults are higher now, but they were lower than their peak, which was actually in 2002-2003 well until prime defeats had started taking off in a way that they didn’t back in 9/11.
@TheAtheistAllegiance So wait you support the military industrial complex how did that work for Germany again
@rsobies
“Never underestimate the difficulty of changing false beliefs by facts”- Henry Rosovsky.
We didn’t discuss it at all afterward as it was a final presentation. I hardly think she changed her mind, but I was sure to be thorough with regard to what really happened. The most I can say was that she seemed to make thoughtful expressions and did indicate that she had learned something. A couple classmates seemed interested, too, so I felt good about it.
@triforcelink. Of course not. The bailout was supposed to maintain a highly unsustainable credit system. Most American debt are virtually useless with a high concentration in the housing market. The irony is that most of these properties are located in poorly serviced suburbs. Do remember, Americans are getting older, and these assets are becoming riskier.
US, especially, has seen the largest misallocation of post-war surplus in the history of humankind. It was put into failed instruments.
@ltkhokie1
You contradict yourself in stating that one Keynesian policy is effective, but another isn’t when they are one in the same. War has the same effect as New Deal programs, it is just different in method. It is massive government expenditure that employs millions and rejuvenates an abysmal demand.
Not only are your numbers wrong, but you ironically just asserted that war helped the economy while Keynesian economics didn’t, when in fact, war is a Keynesian policy on steroids.
@order9066
The economy suffered a double-dip recession because of the Conservative Coalition in the House and Senate, which was successful in removing many of FDR’s New Deal policies. The cause of the slump was a premature slash in spending when the economy wasn’t ready for it.
@HatemongerNTBSF1129
FDR’s policies did benefit the private sector in job creation.
However, it doesn’t really matter because public employment programs rejuvenate the economy in the same manner that private employment does. Employed people have money to spend, businesses gain revenue and ramp up production, hire more people to meet the rise in demand, and ultimately growth in GDP ensues, along with a stabilized and expanding economy.
@tivla
and what does your teacher say now? did he change his mind?
@TheAtheistAllegiance lol what history are you talking about? Actually unemployment was at 17% in 1938 and just started dipping down after we started massively selling weapon and food supplies to Europe for “their” oncoming war. Unemployment was at 24% when FDR took over. A 7% drop in 5 years is hardly a recovery, when these keynesian government intervention policies were inacted in order to lower it below 10 percent by 1937. WW2 brought us out, New deal dug us deeper