Bernanke: 2008 Financial Crisis Was Worse Than Great Depression

[Lakhota]

Former Federal Reserve Chairman Ben Bernanke, a prominent student of the Great Depression, contends that the 2008 financial crisis was actually worse than its 1930s counterpart.

Mr. Bernanke is quoted making the statement in a document filed on Aug. 22 with theU.S. Court of Federal Claims as part of a lawsuit linked to the 2008 government bailout of insurance giant American International Group Inc.

“September and October of 2008 was the worst financial crisis in global history, including the Great Depression,” Mr. Bernanke is quoted as saying in the document filed with the court. Of the 13 “most important financial institutions in the United States, 12 were at risk of failure within a period of a week or two.”

Former Treasury Secretary Timothy Geithner is quoted in the document offering a similarly apocalyptic assessment. From Sept. 6 through Sept. 22, the economy was essentially “in free fall,” he said.

2008 Meltdown Was Worse Than Great Depression Bernanke Says - Real Time Economics - WSJ

This is what Obama inherited from Bush - an economic crisis worse than the Great Depression.

 

[Mustang]

Frankly, I'm sick of listening to conservatives rail against President Obama after the most conservative president in at least the last hundred years (Bush) presided over the largest attack on American soil in our nation's history, got our country into the debacle that was the Iraq War and totally screwed up the occupation and the reconstruction, failed to meet the challenge of the natural disaster of Katrina in New Orleans that everyone saw coming (especially considering the fact that the Federal Gov't couldn't and/or didn't respond to the desperate survivors in N.O. for four whole days), and got taken by surprise by the largest economic meltdown in about 80 years because of a philosophical belief that financial institutions were best left alone and the gov't Federal Gov't shouldn't be involved in overseeing the honesty and integrity of the markets which allowed the problem to be far worse than it otherwise would.

They want to govern again and have another bite at the apple? I say not a chance!

 

[Lakhota]

Once again, I ask the following two questions:

1. What have Republicans done to help ease the economic pain and suffering left by Bush?

2. How much debt has Obama created that wasn't a direct or indirect result of Bush actions?

 

[Manonthestreet]

Get rdy for next round.....should be even better

 

[OnePercenter]

Once again, I ask the following two questions:

1. What have Republicans done to help ease the economic pain and suffering left by Bush?

2. How much debt has Obama created that wasn't a direct or indirect result of Bush actions?

Good luck with that. I'm still waiting for an answer to 'What do Republicans have to offer the middle class', and for the 'over-taxed' to post their effective Federal rate. Noting except bloviating...

 

[Lakhota]

Once again, I ask the following two questions:

1. What have Republicans done to help ease the economic pain and suffering left by Bush?

2. How much debt has Obama created that wasn't a direct or indirect result of Bush actions?

Good luck with that. I'm still waiting for an answer to 'What do Republicans have to offer the middle class', and for the 'over-taxed' to post their effective Federal rate. Noting except bloviating...

Yep, the NaziCons are all smoke and mirrors.

 

[Lakhota]

Gee, I wonder why righties are avoiding this thread?

 

[Manonthestreet]

You avoid answers given.....get rdy for round two.....nothing is fixed...banks are still broke.....and the govt is even more insolvent......

 

[Lakhota]

You avoid answers given.....get rdy for round two.....nothing is fixed...banks are still broke.....and the govt is even more insolvent......

Who will voters blame for it not being fixed? Who should they blame?

 

[Manonthestreet]

Shifting blame game is libs game isnt it....who can we get the public to blame instead of those in office

 

[Lakhota]

Shifting blame game is libs game isnt it....who can we get the public to blame instead of those in office

The ones in office didn't create the Bush mess - they're trying to fix it.

 

[Manonthestreet]

No they arent.......and nothing is fixed........but keep up that blame game mirage ya got going.... that'll shield ya from their mendacity

 

[francoHFW]

^^Brainwashed hater dupe...

 

[g5000]

... and got taken by surprise by the largest economic meltdown in about 80 years because of a philosophical belief that financial institutions were best left alone and the gov't Federal Gov't shouldn't be involved in overseeing the honesty and integrity of the markets which allowed the problem to be far worse than it otherwise would.

That philosophical belief was incorporated into law by the Republican Congress and President Clinton. George Bush just added momentum.

We are still on the very brink of an even greater financial disaster. One which would dwarf the 2008 crisis. And it is because of the 2008 crisis that we are in this bigger mess.

We are now in a race. A race between economic recovery and a meltdown. The banks have a lot of deleveraging to do, and the Fed (and the ECB) is enabling that deleveraging at the expense of everyone else. The taxpayers and the savers.

This deleveraging is accomplished through astronomical carry trades. It's a kind of paradox. In order to help the banks, the Fed has to keep interest rates low (thus murdering savers). But because interest rates are low, the banks have to invest in high risk instruments in order to make any real money.

High risk. Just like what we had leading up to the last crash.

In order to accommodate the banks, the Fed has also had to print trillions of dollars. Trillions which are currently moving about sluggishly, but will accelerate once a solid recovery begins to take hold, thus inducing inflation and again hammering savers.

If at any point all these carry trades blow up, we are looking at banks that will be Too Big To Save, and then we are all royally fucked.

If they don't blow up, then we have to worry about the velocity of money increasing. Once the velocity of money picks up, I have serious, serious doubts the Fed will be able to keep up with the acceleration and be capable of soaking up all that cash, removing it from circulation.

I also believe the federal government won't be in any hurry to see inflation slowed down for a while. After all, high inflation is good for indebted governments and the employment rate.


We got to this point because with each successive failure by the financial services sector, the federal government refused to let the bad actors suffer the consequences of their screw-ups and allow business with better models to step into the vacuum. So we have a snowball effect, finally arriving at Bernanke's reality. A world where failure truly is on a catastrophic scale, all because we ignored the moral hazard of federal bailouts when the pain was manageable.

That pain management policy predates Bush.

It's been the same damned race every time. A race between the recovery aided by a bailout and disaster. In 2008, disaster won.

Will recovery or disaster win this time around? Who knows.

 

[Manonthestreet]

yeah thats it .......is the solution to debt more debt.....how many bank fraudsters went to jail......is bank leverage back to sane levels.........as for Ocare even msm quit defending it

 

[g5000]

.how many bank fraudsters went to jail

That is the real scandal right there. The bad actors aren't rotting in prison, and they should be. Their crimes have actually been incentivized by the feds, which is why the scams are still going on.

 

[Lakhota]

Which party tries hardest to protect the bankster fraudsters by opposing legislation to regulate them?

 

[OnePercenter]

You avoid answers given.....get rdy for round two.....nothing is fixed...banks are still broke.....and the govt is even more insolvent......

There haven't been any answers, just bloviated nonsense.

Nothing is fixed? Really? Corporate America is sitting on $100 Trillion in cash.

Banks are still broke? Which bank is broke? I do see banks continuing to be fined for irregularities from 2008. My favorite is Wells Fargo this year got nailed for Robo-signing AGAIN!

Corporate America is the cause of the US being insolvent. Their $100 Trillion would do fine, and they'll still have 10's of trillions left.

 

[OnePercenter]

That is the real scandal right there. The bad actors aren't rotting in prison, and they should be. Their crimes have actually been incentivized by the feds, which is why the scams are still going on.

How do you put the bad actors in prison when the Bush Administration let them do the bad deeds? I call it the 'BushCo get out of jail free card.'

The Obama SEC has collected billions in fines and are continuing to do so. The problem is that for every one that's found, two more are uncovered.

 

[Manonthestreet]

Which party tries hardest to protect the bankster fraudsters by opposing legislation to regulate them?

Obviously democrat party since none have been prosecuted. More laws is just more words to be ignored. Dont need any m ore laws to prosecute do you.