Fundamental drivers of our current economic problems

[Bob]

The above article is a good read, but I take issue with naming it the “driver of the current economic problems”. Rather, the article decribes some of the symptoms of the problem – a problem which was, and continues to be, the Federal Reserve.

No matter how one slices it, the fact is, the Federal Reserve had the constitutional authority to mandate tighter lending guidelines on all lenders. Greenspan could have stopped the ridiculous practices by lenders which gave loans to people with no money down, bad credit scores, etc…But he didn’t because the banks which he represents were bringing in record profits during the boom. When Bernanke took over, he was slow to act as well. It wasn’t until it was painfully obvious that a severe contraction in the housing market was occurring did Bernanke finally mandate new lending guidelines, but by then it was too late to stop the deflationary contraction. Once Bernanke realized the true extent of the problem on Wall St. he jumped in and paved the way for bailouts for the big banks.

[Allan from Fallbrook]

Bob: Greenspan had no reason to stop the practices. He is in this mess up to his eyeballs, as are the politicians and for the simple reason that no one wanted to bell one particular cat: Telling the American people that we can no longer afford to live the way we do.

Wages have been stagnant for 30+ years now. We’ve been progressively shipping our manufacturing capability overseas for years. We don’t make things anymore, we push paper (the so-called “service” industry) and overvalued paper at that. They’ve been hiding the facts for years now and no one wanted to be the one to tell us this party’s over and the bill is due. So Greenspan presided over nearly two decades of feckless and reckless monetary policy and the pols not only loosened the regulatory leash, they threw it away completely.

Meanwhile, ever larger debt creation at the personal, commercial and national level gave the appearance of “wealth” and “prosperity” where none really existed, but as long as we had our McMansions, Hummers, plasma TVs and lattes, who gave a shit, right?

[Allan from Fallbrook]

Bob: Greenspan had no reason to stop the practices. He is in this mess up to his eyeballs, as are the politicians and for the simple reason that no one wanted to bell one particular cat: Telling the American people that we can no longer afford to live the way we do.

Wages have been stagnant for 30+ years now. We’ve been progressively shipping our manufacturing capability overseas for years. We don’t make things anymore, we push paper (the so-called “service” industry) and overvalued paper at that. They’ve been hiding the facts for years now and no one wanted to be the one to tell us this party’s over and the bill is due. So Greenspan presided over nearly two decades of feckless and reckless monetary policy and the pols not only loosened the regulatory leash, they threw it away completely.

Meanwhile, ever larger debt creation at the personal, commercial and national level gave the appearance of “wealth” and “prosperity” where none really existed, but as long as we had our McMansions, Hummers, plasma TVs and lattes, who gave a shit, right?

[Allan from Fallbrook]

Bob: Greenspan had no reason to stop the practices. He is in this mess up to his eyeballs, as are the politicians and for the simple reason that no one wanted to bell one particular cat: Telling the American people that we can no longer afford to live the way we do.

Wages have been stagnant for 30+ years now. We’ve been progressively shipping our manufacturing capability overseas for years. We don’t make things anymore, we push paper (the so-called “service” industry) and overvalued paper at that. They’ve been hiding the facts for years now and no one wanted to be the one to tell us this party’s over and the bill is due. So Greenspan presided over nearly two decades of feckless and reckless monetary policy and the pols not only loosened the regulatory leash, they threw it away completely.

Meanwhile, ever larger debt creation at the personal, commercial and national level gave the appearance of “wealth” and “prosperity” where none really existed, but as long as we had our McMansions, Hummers, plasma TVs and lattes, who gave a shit, right?

[Allan from Fallbrook]

Bob: Greenspan had no reason to stop the practices. He is in this mess up to his eyeballs, as are the politicians and for the simple reason that no one wanted to bell one particular cat: Telling the American people that we can no longer afford to live the way we do.

Wages have been stagnant for 30+ years now. We’ve been progressively shipping our manufacturing capability overseas for years. We don’t make things anymore, we push paper (the so-called “service” industry) and overvalued paper at that. They’ve been hiding the facts for years now and no one wanted to be the one to tell us this party’s over and the bill is due. So Greenspan presided over nearly two decades of feckless and reckless monetary policy and the pols not only loosened the regulatory leash, they threw it away completely.

Meanwhile, ever larger debt creation at the personal, commercial and national level gave the appearance of “wealth” and “prosperity” where none really existed, but as long as we had our McMansions, Hummers, plasma TVs and lattes, who gave a shit, right?

[Allan from Fallbrook]

Bob: Greenspan had no reason to stop the practices. He is in this mess up to his eyeballs, as are the politicians and for the simple reason that no one wanted to bell one particular cat: Telling the American people that we can no longer afford to live the way we do.

Wages have been stagnant for 30+ years now. We’ve been progressively shipping our manufacturing capability overseas for years. We don’t make things anymore, we push paper (the so-called “service” industry) and overvalued paper at that. They’ve been hiding the facts for years now and no one wanted to be the one to tell us this party’s over and the bill is due. So Greenspan presided over nearly two decades of feckless and reckless monetary policy and the pols not only loosened the regulatory leash, they threw it away completely.

Meanwhile, ever larger debt creation at the personal, commercial and national level gave the appearance of “wealth” and “prosperity” where none really existed, but as long as we had our McMansions, Hummers, plasma TVs and lattes, who gave a shit, right?

[Bob]

[quote=Allan from Fallbrook] So Greenspan presided over nearly two decades of feckless and reckless monetary policy and the pols not only loosened the regulatory leash, they threw it away completely.[/quote]

You are correct, and the Feds continue to do so even now. In fact, current spending is so far beyond control that the only way to solve the debt problem in future years will be to devalue the dollar, raise taxes, and cut entitlement programs. Of course, this will cause inflation, and put a real drag on the economy….but what do the banks care ? They’ve got an unlimited supply of bailout money as long as Obama is in office.

[Bob]

[quote=Allan from Fallbrook] So Greenspan presided over nearly two decades of feckless and reckless monetary policy and the pols not only loosened the regulatory leash, they threw it away completely.[/quote]

You are correct, and the Feds continue to do so even now. In fact, current spending is so far beyond control that the only way to solve the debt problem in future years will be to devalue the dollar, raise taxes, and cut entitlement programs. Of course, this will cause inflation, and put a real drag on the economy….but what do the banks care ? They’ve got an unlimited supply of bailout money as long as Obama is in office.

[Bob]

[quote=Allan from Fallbrook] So Greenspan presided over nearly two decades of feckless and reckless monetary policy and the pols not only loosened the regulatory leash, they threw it away completely.[/quote]

You are correct, and the Feds continue to do so even now. In fact, current spending is so far beyond control that the only way to solve the debt problem in future years will be to devalue the dollar, raise taxes, and cut entitlement programs. Of course, this will cause inflation, and put a real drag on the economy….but what do the banks care ? They’ve got an unlimited supply of bailout money as long as Obama is in office.

[Bob]

[quote=Allan from Fallbrook] So Greenspan presided over nearly two decades of feckless and reckless monetary policy and the pols not only loosened the regulatory leash, they threw it away completely.[/quote]

You are correct, and the Feds continue to do so even now. In fact, current spending is so far beyond control that the only way to solve the debt problem in future years will be to devalue the dollar, raise taxes, and cut entitlement programs. Of course, this will cause inflation, and put a real drag on the economy….but what do the banks care ? They’ve got an unlimited supply of bailout money as long as Obama is in office.

[Bob]

[quote=Allan from Fallbrook] So Greenspan presided over nearly two decades of feckless and reckless monetary policy and the pols not only loosened the regulatory leash, they threw it away completely.[/quote]

You are correct, and the Feds continue to do so even now. In fact, current spending is so far beyond control that the only way to solve the debt problem in future years will be to devalue the dollar, raise taxes, and cut entitlement programs. Of course, this will cause inflation, and put a real drag on the economy….but what do the banks care ? They’ve got an unlimited supply of bailout money as long as Obama is in office.

[patientrenter]

[quote=Allan from Fallbrook]…House in the Hamptons, new Maserati, $2,000/hr escorts, cocaine, Cristal champagne and that custom made French yacht. Why be responsible to your clients when all those toys beckon?[/quote]

Lol! What incentive problem? Oh, yeah. I’m sorry, I got lost in the daydream painted by your words. Was I complaining about that? It’s disgusting. BTW, if I were on the dark side, where could I sign up? I’m doing a paper on it…

[patientrenter]

[quote=Allan from Fallbrook]…House in the Hamptons, new Maserati, $2,000/hr escorts, cocaine, Cristal champagne and that custom made French yacht. Why be responsible to your clients when all those toys beckon?[/quote]

Lol! What incentive problem? Oh, yeah. I’m sorry, I got lost in the daydream painted by your words. Was I complaining about that? It’s disgusting. BTW, if I were on the dark side, where could I sign up? I’m doing a paper on it…

[patientrenter]

[quote=Allan from Fallbrook]…House in the Hamptons, new Maserati, $2,000/hr escorts, cocaine, Cristal champagne and that custom made French yacht. Why be responsible to your clients when all those toys beckon?[/quote]

Lol! What incentive problem? Oh, yeah. I’m sorry, I got lost in the daydream painted by your words. Was I complaining about that? It’s disgusting. BTW, if I were on the dark side, where could I sign up? I’m doing a paper on it…

[patientrenter]

[quote=Allan from Fallbrook]…House in the Hamptons, new Maserati, $2,000/hr escorts, cocaine, Cristal champagne and that custom made French yacht. Why be responsible to your clients when all those toys beckon?[/quote]

Lol! What incentive problem? Oh, yeah. I’m sorry, I got lost in the daydream painted by your words. Was I complaining about that? It’s disgusting. BTW, if I were on the dark side, where could I sign up? I’m doing a paper on it…

[Author]

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