Thread: The Economic Crisis -- Why it happened.

A small business owner that makes bad decisions can suffer the consequences without taking down an economy. Come to think of it, "small entities" are exempt from many regs to give them breathing room. They also pay lower fees to the goverment for some licenses, patents, etc.

My issue with deregulation is focused on the bigger picture. National economy, multibillion dollar corporation type stuff. CEOs of those things are under pressure from multiple directions. First, they are under pressure to show quarterly profits to shareholders and 401k funds. That pressure can, and does, drive short term decisions. Without regulations to provide a counterpressure, the irrational decisions will eventually prevail.

The recent history of deregulation shows that it is a path to failure. Energy deregulation produced Enron. Epic fail. Automotive CAFE standard freeze, which was a move in the direction of deregulation, reintroduced gas guzzlers and an American auto industry that is on the brink of failure. Ford has already put up everything as collateral to get its last loan. Tehy put up everything, even down to their tradmarks. They are nothing but a shell anymore. GM is on teh ropes. Chrysler was privatized about two years ago and is not doing much better. They just laid off 250 salaried employees last week after laying off tens of thousands of workers over the past five years. Then we have the banking industry deregulation. Again, epic fail.

I'm not seeing any evidence of the innovation and growth that this Republican deregulation policy is supposed to foster. Nothing. Not even a tiny example. The power company example in Texas was antitrust, not deregulation no matter how many times laymen use the word.

Blindly deregulating publically traded corporations, i.e. the companies behind our 401ks, IRAs, medical matching accounts, and God forbid Social Security = Epic fail. Track records prove it, human behaviour gaurantees it, and mavericks can't stop it.

Originally Posted by CivilWars

So then how do you explain that industries that are still highly regulated, ie education and your beloved social security, are destined for failure?

That stuff relates to an issue that we agree on, i.e. there are good regulations, so-so regulations, and bad regulations.

As far as Social Security goes, my understanding is the system itself is fair. The issue is a mathematical one and foreseeable. People are living longer than when the plan was implemented and we also have a population bubble of baby boomers that will pass through it. That's nature in action and we have to work through it. Some things have already been done I believe, such as bumping up the retirement eligibility ages a year or two. Another thing that could be done is increase the earnings cap on SS tax. Right now I think it is capped at about $85K. After that the tax is switched off. I don't have any qualms with increasing my tax burden a bit to help out my parent's generation.

With regard to education, that's just a beast. As far as I know the federal government was pretty much hands off in that area except for some funding and the Supreme Court handling separation of church and state questions. The No Child Left Behind Act was the first major meddling in that area. I think that reg could use some tweaking form what I've heard. ::shrug::

That stuff is all government agency stuff, though.

It looks like we are beginning to see eye-to-eye on teh commercial side. I agree that leaving the banking regs in place would have slowed down the economy, but my guess is that the slowdown would have been easier to handle than what we are facing now. According to the news you guys in Texas (I'm assuming you are in TX) aren't exeriencing the foreclosure issue as bad as other parts of the country. Up in Detroit it's terrible. We have subdivisions with less than half the homes occupied. So much value will be lost through vandalism, unmitigated storm damage, etc. with those unoccupied homes. It's sickening and disheartening to see that waste of resources. :3

IMO deregulation caused the banking industry to try and push us at faster than a natural growth rate. It was like an amphetamine and now we have the hangover. I'm just praying that the Repubs are doing some soul searching and seeing that not all deregulation is good lawmaking. If the big companies were really innovative then they would just invent stuff and patent it under existing law. They don't need to pull down our societal safety nets just to foster good ideas from a few creative employees. I know that because I work in the innovation industry. On average only about one in ten thousand corporate employees are truly innovative and no regulations on our books seem to stop them. Fuel mileage reg? They invent to meet it. Emission reg? They invent to meet it. On and on it goes like that.

The rare and truly innovative people move us forward at a natural rate. The remainder of the innovator wanna-bes aren't helped or magically inspired by deregulation. Instead they try to innovate and then, after failing, they finally say screw it, let's put some sex appeal on an existing product and push it with advertising and attractive financing. And so another economic amphetamine pill is popped. :3

That's about all I have on this deregulation topic, Civil. If I go anymore I'm likely to start repeating myself. Thank you for being a tolerant sparring partner.

Peace.

Originally Posted by ebaconjr

IMO deregulation caused the banking industry to try and push us at faster than a natural growth rate. It was like an amphetamine and now we have the hangover. I'm just praying that the Repubs are doing some soul searching and seeing that not all deregulation is good lawmaking. If the big companies were really innovative then they would just invent stuff and patent it under existing law. They don't need to pull down our societal safety nets just to foster good ideas from a few creative employees. I know that because I work in the innovation industry. On average only about one in ten thousand corporate employees are truly innovative and no regulations on our books seem to stop them. Fuel mileage reg? They invent to meet it. Emission reg? They invent to meet it. On and on it goes like that.

The rare and truly innovative people move us forward at a natural rate. The remainder of the innovator wanna-bes aren't helped or magically inspired by deregulation. Instead they try to innovate and then, after failing, they finally say screw it, let's put some sex appeal on an existing product and push it with advertising and attractive financing. And so another economic amphetamine pill is popped. :3

This is not unlike all the commercials on TV that advertise a product. Before the product, the depicted person is ugly, frayed, fed up, disgusted, etc. After the product, the person magically is all smiles, beautiful and life goes their way, simply because they bought that product. Now they are suddently popular, attactive, financially stable and intelligent.

And so, another aspect of the greed of people in this modern day is thus exposed. What's gonna happen about it? Not a thing. It would be un-American. Unless, of course, those people's greed starts encroaching on the 2% of Americans personal wealth and/or power.

Bravo, Ed, for calling a spade a spade. Too bad anything that people in here learn, can't be put to use to better the country as a whole, rather than just a spirited debate on opinions of what others do.

Here's an in-depth report on the financial crisis. It provides a perspective that we haven't discussed yet.

http://www.pbs.org/now/shows/446/video.html

Out of curiosity, have any of the politically inclined watched the above documentary? By politically inclined I mean Civil, Consultant, etc.