2008-09-19, 09:35 | Link #22 | |
I've been Kawarolled
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2008-09-19, 09:52 | Link #26 | ||
Moving in circles
Join Date: Apr 2006
Location: Singapore
Age: 49
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What we had, was a US system that encouraged financial institutions to take ever-increasing risks, without sufficient due diligence. No one checked whether all that easy credit was being translated into productivity gain. There is a fondness, nowadays, for developed economies to rely heavily on monetary policy to fix these crises, ie, by setting interest rates to control the supply of money. But merely controlling the money supply doesn't fix an economy's problem in the long run. Ultimately, an economy is about trading goods and services. If all the extra money generated by securitisation isn't being used to grow the pie, America's problem won't be fixed. Same goes for any developed economy that follows similar strategies. |
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2008-09-19, 10:26 | Link #27 |
Observer/Bookman wannabe
Join Date: Oct 2006
Location: Singapore
Age: 38
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I'm more worried about Hank Paulson's promise to roll out the cash, to the tune of hundreds of billions of dollars, at a time where the US dollar may become worthless. Must the world continue to foot the bill?
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2008-09-19, 11:51 | Link #29 |
Not Enough Sleep
Join Date: Nov 2003
Location: R'lyeh
Age: 48
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just wondering what everyone's opinion on the feds response to this whole mess this year?
other then the bear stern bailout i really can't fault how Paulson and Bernanke on how they handle all this crap. I see a lot of critisms on both these guys but i haven't heard of anyone offer a better solution.
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2008-09-19, 18:29 | Link #30 |
Senior Member
Join Date: Jun 2008
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As I understand the US Federal Reserve is not really government, it has representatives of the US Government on it's board, but the money under it's control is capital contributed by private banks. So this whole "the US government is bailing the banks out with taxpayer money" we're getting at this end of the world isn't right.
Anyone feel free to correct me if I'm wrong. |
2008-09-19, 18:41 | Link #33 | |
Kuu-chan is hungry
Join Date: Apr 2007
Location: Raleigh, NC
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2008-09-19, 19:45 | Link #34 | |
(ノಠ益ಠ)ノ彡┻━┻
Moderator
Join Date: Mar 2006
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I do see people complaining about it, but it's something like having a cut. Would you rather pour alcohol on it to clean it and have it sting like crazy, or wait until the cut is infected and really starts to hurt? The speech reminded me a bit of a tabula rasa approach (the government is basically spend a lot of reserve money to eat the debts), but no matter what the taxpayer is taking a hit. I'd rather it be as a result of the path to getting this mess fixed than it be because the financial system is collapsing.
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2008-09-19, 20:09 | Link #35 |
Gregory House
IT Support
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I don't have much to say on the point of the system going down, because something like the ruthless consumerist capitalism the US's been practicing is bounded to fall to pieces sooner or later.
The only thing I have to say is that this year's falldown was predictable since way more than a year ago. I can only scratch my head at the people amazed at this sort of outcome.
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2008-09-19, 20:39 | Link #36 | |
Observer/Bookman wannabe
Join Date: Oct 2006
Location: Singapore
Age: 38
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2008-09-19, 20:46 | Link #37 | |
(ノಠ益ಠ)ノ彡┻━┻
Moderator
Join Date: Mar 2006
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2008-09-19, 22:39 | Link #38 |
Senior Member
Join Date: Jun 2008
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An unelected financial elite is now entrusted with the assignment of getting us out of a disaster into which an unelected financial elite plunged the nation.
We are just spectators. What the Greatest Generation handed down to us — the richest, most powerful, most self-sufficient republic in history, with the highest standard of living any nation had ever achieved — the baby boomers, oblivious and self-indulgent to the end, have frittered away. Last 2 paragraphs of Buchanan's essay. I wouldn't change a word of it. Very well written and said. http://buchanan.org/blog/2008/09/pjb-the-partys-over/ |
2008-09-19, 23:43 | Link #39 | |
Senior Member
Join Date: Apr 2007
Location: East Cupcake
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Oh Pat, you have some to teach us, but still so much to learn. The Baby Boomer generation, easily the most self-indulgent American generation, are not the perpetrators of this long time coming economic failure. This article is blaming the victim but not the "criminal". It was the "Greatest Generation" that removed our currency from the gold standard and helped to create the Federal Reserve that has so foolishly squandered our resources. Added to that, it wasn't until the early 1990s that Baby Boomers even attained enough power to shift our economy in other directions, before that, the globalization of our economy was lead by David Rockefeller and other like minded businessmen. What about the Korean and more importantly the Vietnam war and all the other bloodshed in the name of democracy against unknown and ultimately sometimes none existing threats (I am still trying to figure out why the "Greatest Generation" destroyed South America, let alone the Middle East), that led to hundreds of billions being spent for absolutely no reason. What about the long running failed energy policies? or even Nafta? All enacted by the "Greatest Generation". Who controlled Wall Street? The Educational System? Who created "unlimited credit"? Need I say more, cause there is still much more to say. Pat, you really need to learn that simply because something happened recently, does not necessarily make it the fault of the younger generation. The vast majority of our leaders for the past 60 years have been members of the "Greatest Generation", and you shifting the blame to the preceding generation is very low, and even a little sickening (though, I will admit that the Baby Boomers are at fault for being to self-indulgent, and, of course, not voting the various scum out of office when they could have). We are all partially responsible for this crisis, of that you are correct, but do not forget who gladly and willingly led us down this avenue. edit: Now having read the full article (and not just the two supplied paragraphs, let me say that many of the things he listed as being bad are in fact very good (such as globalization or borrowing and lending or realistically much that he claims is bad is in fact fairly good but needs to be properly regulated, something that he opposes for the stupidest reasons, as this economic crisis has shown us yet again), so please take Pat's words of advice with a grain of salt (is that the expression?). edit: To add insult to injury, here is a fun article that Solomon posted on the Election board that helps to explain the current crisis: Who is the Blame? Last edited by james0246; 2008-09-20 at 00:17. |
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2008-09-19, 23:55 | Link #40 | |
Moving in circles
Join Date: Apr 2006
Location: Singapore
Age: 49
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I have mixed opinions about the Patrick Buchanan article quoted above.
He's right in that, for years, "Americans have spent more than we earned. We save nothing. Credit card debt, consumer debt, auto debt, mortgage debt, corporate debt — all are at record levels". However, I don't agree with his opinion that globalisation is to blame. He wrote: "Up through World War II, we followed the Hamiltonian idea that America must remain economically independent of the world in order to remain politically independent. But this generation decided that was yesterday’s bromide and we must march bravely forward into a Global Economy, where we all depend on one another. American companies morphed into 'global companies' and moved plants and factories to Mexico, Asia, China and India, and we began buying more cheaply from abroad what we used to make at home: shoes, clothes, bikes, cars, radios, TVs, planes, computers." It seems that Mr Buchanan doesn't understand how globalisation works. Those American jobs would have been lost to Mexico, China and India anyway, regardless whether American companies "went global". Globalisation is nothing more than Adam Smith's idea for producers to specialise in their respective areas of competitive advantage, written large on a global scale. Even as the United States began hiving off the industries that it is no longer competitive in, it began to develop new competencies in areas that other countries cannot yet match, for example, advanced computing and entertainment. The trade deficit that Mr Buchanan complains about is, at heart, caused by two factors. First, and more importantly, by the difficulty of converting redundant baby-boomer workers into other jobs once their industry went bust. I blame this on unionism, especially in the car industry. It's quite simple: American cars simply aren't as competitve in global markets as Japanese or European cars, that's why less are being sold. Greater innovation was required, but that could mean more redundancies, hence the unions stepped in and prevented it. Second, the trade deficit, like almost every other deficit in the United States, has been funded by easy credit, the same factor that caused the sub-prime mess we're witnessing today. The simple fact is that Americans have grown used to spending beyond their means. The consumption had to go somewhere, and in this case, it was on imported goods, hence the trade deficit. The idea that the United States must isolate itself from the world to retain its clout is dangerously wrong today, both for itself and for the world economy. The flow of goods and services has gone massively global since the 1990s, and this trend is not going to turn back. The most fundamental fix for any country that "suffers" under globalisation is to address its economic productivity, through education and infrastructure development. Then, it has to ensure relatively free movement of labour, including foreign labour, to whichever industry needs it most. It has to allow competition at home, and through that competition each company becomes sharper, leaner and more innovative. And when critical mass has finally been achieved, the industry as a whole is ready to take on the world. No, I don't see any solutions in Mr Buchanan's suggestions. I see more danger instead. A better model for the United States would probably be Japan. Quote:
During the boom years, Asian banks were criticised for not making better use of their shareholders' money. Well, look who has the last laugh now. |
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