AmericanPapist Comments
I agree with your comments...
I think one aspect of this issue that I rarely hear or read about is the 'blame' at the lower levels.
Everyone wants to blame the government, administration, greedy CEO, Wallstreet, etc.. all with good reason.
However, the finger also has to be pointed back at the individuals who pushed that first domino.
Individuals that bought houses and gained loans that shouldn't have. Everyone wants things that they can't afford. Having a house is apart of the American dream. My family saved and scrimped for years before having enough to put down on a purchase of a home. A very small home... with a fixed loan and impounds added to the moregage, i might add.
I have relatives that ventured down that 'funny loan' path to purchase the BIG House of their dreams, through a REALATOR who inticed them with a big fat Country Wide variable loan.
Everyone in the family was cautiously happy for them then, and very sad that they're loosing their home now.
We are trying to help them out as best we can, but the out cry from them is still pointed at the higher levels.
Hmmmmm....that just doesn't sit well with me.
Anyway, just thinking out loud here. I don't have the economic savvy to suggest a fix for this mess.
However, I find it rather interesting that the readings for this week are taken from the Book of Eccesiasties.
"Vanity of vanities" as Qoheleth observes in his community.
Quite appropriate I think and worth reading the entire book.
...didn't run this thru spell check so please excuse the typo's and such.
Thanks for the great blog. I visit frequently.
WCC +
Regarding your comment about how the problem has been the departure from free market principles for government regulation I think you have developed a false dichotomy.
Adam Smith-that great hero of capitalism himself-in the Wealth of Nations asserts "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
For a market to be free it must be efficient. For a market to be efficient those involved in that market must be kept from engaging in conspiracy, price fixing, or practices unjustly limiting the ability to enter and compete in the market.
The only way to accomplish this (due to an unfixable systemic defect in consumer information) is through government regulation.
That does not mean all regulation is good. Instead the government only keeps the market free. It does not hand out land grants. It does not prop up investment bank. It does not establish loan companies. It does print more money.
The problem with our economy is that Wall Street gets its money through crony capitalism, government handouts, and the Ponzi scheme that is the stock market.
This is then exacerbated by a monetary policy that allows for the illusionary expansion of the economy through printing more money. We must return to the gold standard. We must enforce proper and just anti-trust laws. We must require companies to pay dividends on their stocks and work out some other measures to make the stock market rational rather than speculative.
So in conclusion, government regulation is necessary, but only to increase market efficiency and to prevent the use of the securities markets as a way to fleece the average American out of their hard-earned savings.
L'OR on the American economy. Yawn. Musta been a slow news day.
Tom,
If you have not read it already, Ron Paul's response to Bush's address the other night was very helpful for me in trying to wrap my head around what is happening right now.
If you can't track it down I can forward it to you.
Jon - thanks. I have it waiting in my inbox for when I get the time to read it.
Has anyone seen this presentation about Obama's involvement with the economic collapse?
http://www.youtube.com/watch?v=H...h?v=H5tZc8oH--
o
And Fox News:
http://www.youtube.com/watch?v=L...h?
v=LPSDnGMzIdo
Our Economy is a huge racket designed to make slaves out of people who work.
The means of this system is:
1. Fiat Currency & the Federal Reserve - this has grown the "Money Power" to be the dictator of our government policy for years.
2. The abuse of the Corporate Form - this has given us a State that services these golums rather than real persons. Ask yourself why corporations have human rights, but babies in the womb do not?
3. The deliberate undermining and export of our productive base out of this country to the east - this has taken away the only basis for claiming that our dollar has any value in the world.
4. The tying of the fiat dollar to oil sales as a means of forcing other nations to finance our debt.
5. The liberalization of credit card regulation and their subsequent expansion - this created an abundance of credit and immoral lending practices that has led to changes in the bankruptcy laws and has make us a people of debt.
6. Artificially low Fed interest rates creating malinvestment and moral hazzard.
I could go on.
Our economy is a racket. But people are waking up, and that is why starting Oct 1st, the military will begin tours in your home town! Look it up for yourself. We are being invaded by our own troops next month.
Oh noes! They are tunneling under my house!
I agree with westcoastcatholic.
Too many people living beyond their means help create this problem.
Secondly, look up "Community Reinvestment Act", which, implemented during Carter's administration, indicates how government interference with the market forced lenders to lower their standards in order for low income people to purchase homes. Further provisions were enacted during Clinton's administration which massively increased subprime mortgages. It is unsound economics.
During Obama's years as a "community organizer", he worked for Miner, Barnhill & Galland, a law firm which sued banks (Citibank, specifically for Obama) for not issuing enough subprime loans to minorities. It is that kind of strong arm tactics, coupled with PC sentiment, which got us into this mess.
In 2001, the Bush Administration warned of the Fannie Mae and Freddie Mac problems. Congress turned a deaf ear. In 2005, John McCain also sounded an alarm, and his I-190 bill, which called for reform in regulation of the subprime mortgage mess, was defeated.
Not one person or party is entirely to blame for this debacle. Indeed, I think the greater portion of blame lies with our society, which no longer practices monetary prudence. But I see that no politician or cleric wishes to lay that burden on the feet of individual Americans.
I do.
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