'Financial Crisis Was Avoidable, Inquiry Finds'

[midcan5]

I realize this has had been a hot topic, but Sewell does clear and excellent OPs.

By Sewell Chan

"“The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done,” the panel wrote in the report’s conclusions, which were read by The New York Times. “If we accept this notion, it will happen again.”"

"The report does knock down — at least partly — several early theories for the financial crisis. It says the low interest rates brought about by the Fed after the 2001 recession; Fannie Mae and Freddie Mac, the mortgage finance giants; and the “aggressive homeownership goals” set by the government as part of a “philosophy of opportunity” were not major culprits.

On the other hand, the report is harsh on regulators. It finds that the Securities and Exchange Commission failed to require big banks to hold more capital to cushion potential losses and halt risky practices, and that the Fed “neglected its mission.”"

http://www.nytimes.com/2011/01/26/business/economy/26inquiry.html?

http://www.nytimes.com/2011/01/28/business/economy/28inquiry.html?_r=1&ref=sewellchan

But 'Republican Panelists Dissent on Cause of Crisis' - of course they would, they work for Wall street not Main street.

Republican Panelists Dissent on Cause of Crisis - NYTimes.com


"A final word on politics. As in economics nothing is certain save the certainty that there will be firm prediction by those who do not know. It is possible that in some election, near or far, a presidential candidate will emerge in the United States determined to draw into the campaign those not now impelled to vote. Conceivably those so attracted - those who are not threatened by higher taxes and who are encouraged by the vision of a new governing community committed to the rescue of the cities and the impacted underclass - could outnumber those lost because of the resulting invasion of contentment. If this happens the effort would succeed." John Kenneth Galbraith 'The Culture of Contentment'

 

[midcan5]

While psychology plays a critical part in economics, jobs provide the skeleton. Excellent piece at site noted below.

'A Fix For Today, and Tomorrow' Robert Pollin

'This article is part of Back To Full Employment, a forum on the possibilities for full employment in today’s economy.'

"Creating an economy with an abundance of decent employment opportunities—a “full-employment” economy, as I have used the term—is a matter of basic ethics. Without full employment, the fundamental notion of equal rights for everyone—the core idea emanating from the Enlightenment and elaborated upon in both the liberal and socialist traditions—faces insurmountable obstacles in practical implementation.

Figuring out how to create and sustain a full-employment economy inevitably requires serious engagement with, among other things, technical issues in economic theory and policy, high-brow political theory, and ground-level political fighting. Ruy Teixeira’s excellent comment provides a clear sense of the combustible brew of political challenges facing us, especially now, with employment conditions worse than at any time in the past 70 years. It is therefore no surprise that the eight respondents have delivered a wide array of arguments. I will focus on five of the major themes they raise." Boston Review — Robert Pollin replies

 

[editec]

It's always easy (assuming you're willing to wade into the real issues, few are) to see what mistakes were made after the fact.

I mark the beginning of this crises during the CLINTON administration when the economic masters passed a law preventing the government from regulating DEREIVATIVES.

That wasn't the only thing leading to the crises, but it was an enormous part of the problem and had those dereivative been regulated a lof of the other problems that happened could not have occurred.

 

[Defiant1]

While psychology plays a critical part in economics, jobs provide the skeleton. Excellent piece at site noted below.

'A Fix For Today, and Tomorrow' Robert Pollin

'This article is part of Back To Full Employment, a forum on the possibilities for full employment in today’s economy.'

"Creating an economy with an abundance of decent employment opportunities—a “full-employment” economy, as I have used the term—is a matter of basic ethics. Without full employment, the fundamental notion of equal rights for everyone—the core idea emanating from the Enlightenment and elaborated upon in both the liberal and socialist traditions—faces insurmountable obstacles in practical implementation.

Figuring out how to create and sustain a full-employment economy inevitably requires serious engagement with, among other things, technical issues in economic theory and policy, high-brow political theory, and ground-level political fighting. Ruy Teixeira’s excellent comment provides a clear sense of the combustible brew of political challenges facing us, especially now, with employment conditions worse than at any time in the past 70 years. It is therefore no surprise that the eight respondents have delivered a wide array of arguments. I will focus on five of the major themes they raise." Boston Review — Robert Pollin replies

Komrade, do you believe government should take over all businesses to avoid these problems in the future?

 

[andy753]

Hindsight is always 20/20. With that being said, maybe we should look at current problems that might become HUUUUUUge in the near future. Most notably, social security, state run pensions, job exports, ect. The problem is getting people to change a small problem before it becomes a big problem.

 

[Truthmatters]

Your problem is many were talking of this before it happened.

They were trashed by the Bush admin.