The Myth of Laissez Faire

[dryad73]

I forgot to post this last week. I thought it was a really interesting article. The premise of the article is basically that we do not live under a Laissez Faire system of capitalism so it is ridiculous for everyone (from the media to leaders of Germany and France) to be blaming it for our current economic crisis

Comments

[roofless]

Greenspan says flaw in market system
http://www.bloomberg.com/apps/news?pid=20601087&sid=a_IH5AnCyOm4&refer=home

My simplistic take on it is that within the 40 years that the system "worked", two new generations have come to be. Each new generation being less moral then the previous. Insert greed, etc. and look where we are.

Ties in nicely with the declining society theory.

[dryad73]

"Greenspan says flaw in market system"

Of course he's back pedaling now. He's the one responsible for approving risky financial instruments, namely the mortgage backed securities, that are such a problem now. It's not as if no one saw problems with them to begin with. I think Coy posted an article written a few years ago that seems prescient now considering the current circumstances.

"Each new generation being less moral then the previous. Insert greed, etc. and look where we are."

I think history refutes this. I posted an article discussing how this situation is very similar to what happened in 1873 and of course we also have the great depression to look at. But when do we ever learn from history? But hey, I know how you prefer simplistic views and tie in's with theories. Makes it all seem so clean and tidy ;)

[roofless]

I think history refutes this. I posted an article discussing how this situation is very similar to what happened in 1873

I highly doubt that. We hadn't even declared independence then. OOOOHHH!!!! BUSTED!

Simple views are clean & tidy, and are often - for the most part - accurate. Studies have shown this to be the case 85% of the time.

[dryad73]

"I highly doubt that. We hadn't even declared independence then. OOOOHHH!!!! BUSTED!"

Um, it was in 1776, so that means we declared independence 97 years before the panic of 1873.

Now who's busted?

[roofless]

I was just kidding about the dates.

Still, I think a simple lack of ethics goes a long way to describing some of the "flaws" in the market system that got us to where we are today.

[dryad73]

Greedy people exist in all time periods. I don't think it's more now although I admit I'm not familiar with the theory you mentioned.

I think greed intensifies when you have situations like the feds artificially holding interest rates low and basically telling banks to make unsound loans to increase home ownership. Then approving mortgage backed securities?!? I don't understand how that even got approved. You have no idea what kinds of loans were made so why would you invest in it?

In a nutshell it's like the government giving financial institutions the green light for greed. I don't blame the government entirely, but I do think they are largely responsible and it concerns me that neither candidate has any idea.