In economics misery today:
2. Ritholtz says the bailout's cost has skyrocketed to $3 trillion.
3. How the invention of derivatives helped destroy us. (I will remind you that Bill Clinton's economic team refused 1998 advice that they regulate the new derivatives market).
UPDATE: 4. The Asian stock markets are tanking today. As I write, the Nikkei's down 10 percent.
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The problem I wish to highlight is that the elites of both parties failed us.
That's no secret ... but I don't get why we'd have welcomed financial advice from politicians when we tend to shun the practice of insurance bureaucrats making medical decisions for doctors.
I also wonder whether they'll wait until after the election to give us the real bad news on the economy. Or if they ever will.
The last few years Bush has championed his "ownership" society theme as the reason homeownership is the highest in history, forget that regulation is the lowest and fake loans were the highest, but the fact is that the laissez-faire regulation of Republicans is at the heart of this financial meltdown. If I suggested we needed fewer police and a smaller military people would go nuts and claim that anarchy would rule. But suggest that market should have cops on the beat is like invoking a Satanic prayer. Yet, stores have surveillance cameras and security hiding behind mirrors? Don't they trust us?
I guess the only consolation is that they packaged it up and sold it world wide. Now that is funny. We took the world down with us. Gotta luv it ;) Heckuva job Georgie! Perhaps we should privatize social security and take it out too! As the late Carl Sagan would say, "Billions and Billions and Trillions" of dollars vanished in an instant. So where did they go?
By the way, anyone notice the antional debt double these past eight years? Six of it with a Republican majority and president.
Jontemplar: Are you saying that since the Social Security "Trust Fund" is held by the government we can be confident that it is safe?
Someone needs to explain to me how I can be confident that Social Security will be there when I retire. From where I sit, with a national debt soon to exceed $10 trillion, any future benefits that I might recieve are safer where they are subject to the vagaries of the market rather than the government.
Anyone under the age of 50 who thinks they are going to get any kind of SocSec "benefits"---a more honest term would be "stolen money"--when they retire is taking the short end of a bet. Our national debt is about to explode, thanks to boosted Medicare spending and the several trillions in new debt to "bail out" the great financial houses.
Sooner or later, the rest of the world is going to decide that there is more American government debt than there needs to be, and they'll stop buying so much of it. Interest rates will go up, and the Obama Fed will have to begin monetizing. Spending will have to get cut, and all that entitlement money will be a tempting target. At the very least (and with any sort of luck), the big benefit programs will be means-tested. Look for all sorts of new taxes, including a wealth tax.
Translation: late-stage Boomers and GenXers had better start saving like maniacs. Those savings had better be stashed someplace where His Oneness and His minions in the Congress can't get at them, either.
Your servant,
Lord Karth
Hodge
Every time a conservative cites Clinton, etc, as part of this disaster, it only reminds me that the even-further-lefties who criticized the Clinton-era "third way policies" were in some small part correct to criticize what they called "neoliberalism."
Exactly. As someone who wasn't a liberal during Clinton, even I couldn't help but notice that, for a 'liberal', he seemed awfully conservative in economic issues.
Later on, when I got all the Libertarian ideas pounded out of my head and started thinking the government should, indeed, actually help people, I started wondering. By now I actually dislike Clinton more than when I was, in theory, on the other side, when I thought he was being unfairly and constantly attacked by nonsense from 'my' side that had absolutely nothing to do with actual policy.
Now, I still think he was unfairly attacked, but that he totally dropped the ball on, for example, health care. (As did Hillary.) And then didn't even bother trying to pick the ball back up for any other progressive thing. So while he was very popular and didn't deserve the crap that was thrown at him, his presidency was a vast missed opportunity.
I don't think they were really substantially in the right on many specific issues, but conservatives should be aware that at a time when the right as a whole is as discredited as it has been in 80-odd years, for a lot of people the next logical step after "Clinton was also to blame" is "Clinton's critics were right!"
Well, they were. If Clinton had pushed regulations, and there's actually a lot of regulations that the executive could do without the legislature, or even just strictly enforce existing regulations, it might have helped. Or it might have just delayed banks screwing up the economy for another year...right in the middle of McCain's first term. (So, hey, what am I complaining about?)
And I want people here to admit it: If Kerry had won in 2004, and had walked into office and immediately pushed for slowly dismantling the derivatives market and flatly disallowing anything else put into it...would you have supported it? If your answer is 'no', and I suspect, if you're honest, that it is 'no', does that not indicate some sort of problem with your political philosophy?
In other words, right now, a lot of conservatives are besides themselves because of this absurdly huge nationalization of industry. (Trust me, a lot of liberals are just as freaked out.) I want to know, from a conservative POV, how this should have been stopped from happening.
And no nonsense about 'not forcing banks to loan to low income people'. That was a microscopic aspect of the market, as has been pointed out repeatedly they might comprise 2% of subprime loans, and those loans were less likely to be packaged into securities, or to fail in the first place. Most of the crap being shoved into securities was from independent mortgage companies who weren't covered under any such law.
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