I agree with SD Realtor the Fannie and Freddie thing has Democratic hands all over it so we can safely lay blame on both parties. It is tempting to blame Bush for everything, most of that has something to do with anger over foreign policy. Here is critique of the Bush administration in the form of a letter to Obama from Bill Gross at Pimco, a long time registered Republican.
“Dear President Obama:
You have inherited a mess. Your predecessor, fixated on emulating a former Republican icon from a far different economic era, chose to emphasize tax cuts for the rich and excessive consumption for all Americans. He promoted deregulation and free markets when, in fact, the markets and their institutions needed tough love. Over eight years, he failed to put forth a coherent energy policy. He needlessly invaded Iraq and lowered worldwide esteem for this nation as a symbol of freedom and benevolence.”
“He promoted deregulation and free markets when, in fact, the markets and their institutions needed tough love.”
It pains me to read this because I am an independent that leans Libertarian. The words free markets and deregulation always had positive connotations to me. It seems to me that many of the seeds of loose lending standards rest with the Democrats, allowing financial institutions to leverage 30, 40 50 times, rest with the MO of this administration. The result was a perfect storm of handing out bad loans and leveraging them to the hilt.
Now whether you like it or not Laissez-faire capitalism is now officially on trial. I guess its the result of the whole melt down of the western financial credit market thing. Fair enough. My fear is that the pendulum swings too far back the other way into Keynesian economics. Read Republican Bill Gross’s letter to Obama and its pretty much suggesting pump-priming of cutting taxes, increasing government borrowing, and spending during an economic down-turn which is classic Keynesian economics or better known as Stagflation. There has to be a better way to all this.
