Crisis
Okay, so for those of you who don't know that our country has once again screwed itself into a corner, here is something to explain things very briefly, and as unbiased as I can possibly make it:
In the late 70's, legislation was passed that allowed for lower-income families to receive high-risk mortgages so that they could buy homes that they really couldn't afford. This was all well and good, until the mid nineties (specifically 1995), when legislation was forced thru to increase the number of people who could get these loans exponentially. If banks refused these loans, they were hit with severe fiscal penalties, see "Social Engineering."
All this was well and good, until some people in the senate noticed in 2003/4 that housing prices were increasing much faster than inflation and other economic forces would normally dictate, creating what is more commonly referred to as a "bubble." when they came forward and actually asked for more oversight into the issue, they were laughed at (by the party generally calling for more government, at least historically), and given statements from the chairs of Freddie and Fannie saying that things were fine.
This was repeated in 2005 and again in 2007, by mostly the same individuals, until the collapse of Bear Sterns, when both parties realized that the shit had finally hit the fan, and that doomsayers were right all along. Finger-pointing started immediately.
However, no one is really trying to establish liability for two reasons: A) both parties would be held accountable, at least for part of it, and B) the party currently in the majority control of the government has received about 8-12 times what the other party has in donations (legal or otherwise) from the companies or their affiliates (hence their denial of any liability whatsoever).
Now then, considering that we are a free-market society, and if this were your money lost in the stock market, no one would give a rats' ass that you had lost it, why are we bailing them out? Well, because the people supposedly feel that something must be done (even though every representative has received calls on average 10:1 against doing anything), and we need to shore-up the markets.
This will all end soon, I promise.
So, their plan is to do what the government has done to solve almost every problem since the 1930's: throw money at it. And while they are at it, throw money into causes that support their elections (see ACORN and pork (political) if you want to know why the Republicans were so against it). Now, as anyone who has a clue can tell you, this is almost never the solution. Ask any economist and they can tell you that at best, this is a stall for a year, maybe two, then we will go into a recession that will be just as bad, if not worse than what inaction would cause. The only difference that we would be sure to make is that we would be further in debt.
Now, I feel you have enough background to form a valid political opinion on this. I admit there was some bias, but I am a human being, and so, there you have it. Anyone who claims to be unbiased is fooling themselves.
If you want my opinion on the matter it is this:
We have been inflating the economy for so long that we are going to go into recession either way, it is the unavoidable fact of economics, accept it. Oh, and by the way, comparing this to 1929 is a bad example. If you want a better one, look up the Bank Run of 1907.
Passing the bill is a bad precedent, as it sets the tone for the government to buy into businesses (aka socialism). Although a completely free market is not actually a good thing, neither is socialism. There should be just enough oversight to make sure that companies aren't screwing the people (which despite popular opinion, they aren't, again,economics people), but not get in the way of business.
Also, any company that is a business/government hybrid is doomed to failure, I am sorry, but it doesn't work.
And as to those of you who claim we never could have seen this coming, I remind you that the bill that caused this had to be forced thru, and down conservative (not necessarily Republican, remember there is a difference) throats. The downfall was also predicted by numerous people over the years, including one of the politicians running for president (hint, not the one receiving gobs of funds from the failing banks).
So, as I stated in the beginning, we really have screwed ourselves, it is time for us to just accept it and do what the overwhelming majority of the citizens of this country have said: buckle-up and prepare for recession, it is going to be a bumpy ride.
In the late 70's, legislation was passed that allowed for lower-income families to receive high-risk mortgages so that they could buy homes that they really couldn't afford. This was all well and good, until the mid nineties (specifically 1995), when legislation was forced thru to increase the number of people who could get these loans exponentially. If banks refused these loans, they were hit with severe fiscal penalties, see "Social Engineering."
All this was well and good, until some people in the senate noticed in 2003/4 that housing prices were increasing much faster than inflation and other economic forces would normally dictate, creating what is more commonly referred to as a "bubble." when they came forward and actually asked for more oversight into the issue, they were laughed at (by the party generally calling for more government, at least historically), and given statements from the chairs of Freddie and Fannie saying that things were fine.
This was repeated in 2005 and again in 2007, by mostly the same individuals, until the collapse of Bear Sterns, when both parties realized that the shit had finally hit the fan, and that doomsayers were right all along. Finger-pointing started immediately.
However, no one is really trying to establish liability for two reasons: A) both parties would be held accountable, at least for part of it, and B) the party currently in the majority control of the government has received about 8-12 times what the other party has in donations (legal or otherwise) from the companies or their affiliates (hence their denial of any liability whatsoever).
Now then, considering that we are a free-market society, and if this were your money lost in the stock market, no one would give a rats' ass that you had lost it, why are we bailing them out? Well, because the people supposedly feel that something must be done (even though every representative has received calls on average 10:1 against doing anything), and we need to shore-up the markets.
This will all end soon, I promise.
So, their plan is to do what the government has done to solve almost every problem since the 1930's: throw money at it. And while they are at it, throw money into causes that support their elections (see ACORN and pork (political) if you want to know why the Republicans were so against it). Now, as anyone who has a clue can tell you, this is almost never the solution. Ask any economist and they can tell you that at best, this is a stall for a year, maybe two, then we will go into a recession that will be just as bad, if not worse than what inaction would cause. The only difference that we would be sure to make is that we would be further in debt.
Now, I feel you have enough background to form a valid political opinion on this. I admit there was some bias, but I am a human being, and so, there you have it. Anyone who claims to be unbiased is fooling themselves.
If you want my opinion on the matter it is this:
We have been inflating the economy for so long that we are going to go into recession either way, it is the unavoidable fact of economics, accept it. Oh, and by the way, comparing this to 1929 is a bad example. If you want a better one, look up the Bank Run of 1907.
Passing the bill is a bad precedent, as it sets the tone for the government to buy into businesses (aka socialism). Although a completely free market is not actually a good thing, neither is socialism. There should be just enough oversight to make sure that companies aren't screwing the people (which despite popular opinion, they aren't, again,economics people), but not get in the way of business.
Also, any company that is a business/government hybrid is doomed to failure, I am sorry, but it doesn't work.
And as to those of you who claim we never could have seen this coming, I remind you that the bill that caused this had to be forced thru, and down conservative (not necessarily Republican, remember there is a difference) throats. The downfall was also predicted by numerous people over the years, including one of the politicians running for president (hint, not the one receiving gobs of funds from the failing banks).
So, as I stated in the beginning, we really have screwed ourselves, it is time for us to just accept it and do what the overwhelming majority of the citizens of this country have said: buckle-up and prepare for recession, it is going to be a bumpy ride.