The Many Collapses of Keynesianism

[Brutus]

This is true, and the hope is that more and more people will come to accept those realities.
What, for keeping interest rates low because inflation and unemployment was were under control? We can also blame what Fannie and Freddie did on the fact that the sun made life possible on the earth.

Those things appeared to be under control because we were in the boom phase. If credit hadn't been so cheap then banks couldn't have made all of those risky loans that they made, and who made credit cheap? The Fed. The market should be setting interest rates, not a central planner.

Dear mr Mises.

The banks didnt care about wether the money was cheap or not. They didnt care if the lendee paid the loan. They sold interest only loans to anyone who passed the "mirror test" and then repackaged those loans off into securities and then SOLD them.

Why do you people keep making up crap about what happened?

THey sold then you silly git. They made money off them and then fucked the entire world economy.

You know why they did that?

To make money.

They did it because they could.

They did it because the regulations were lifted on them acting as securities brokers.

Man you people are propganda thick in the membrains

please tell us why you seem to blame the banks rather than Fanny Freddie and the Fed? Thanks

 

[Brutus]

...The Great Depression was only great because Hoover and FDR didn't allow the correction to happen. The same reason that this recession is "great." Panics, depressions, recessions, or whatever you want to call them are all examples of the market trying to correct itself which is absolutely necessary...

This is true, and the hope is that more and more people will come to accept those realities.

...Fannie and Freddie were only able to do what they did because of the Fed...

What, for keeping interest rates low because inflation and unemployment was were under control? We can also blame what Fannie and Freddie did on the fact that the sun made life possible on the earth.

it is a fact that the Fed had a policy to inflate or bubble up the housing market. The money to buy and bid up the prices on all those houses came from the Fed, not the Girl Scouts. THis is why both sides now blame the Fed.

It seems the greatest economists and greatest newspapers on the left and right agree that liberal interference caused the crisis. Sorry
"First consider the once controversial view that the crisis was largely caused by the Fed's holding interest rates too low for too long after the 2001 recession. This view is now so widely held that the editorial pages of both the NY Times and the Wall Street Journal agree on its validity!"...John B. Taylor( arch conservative, author of the Taylor Rule)

" The Federal reserve having done so much to create the problems in which the economy is now mired, having mistakenly thought that even after the housing bubble burst the problems were contained, and having underestimated the severity of the crisis, now wants to make a contribution to preventing the economy from sinking into a Japanese Style malaise....... - "Joseph Stiglitz"


If you still can't grasp what happened why not read "Reckless Endangerment" by NY Times person and see if you can say with a straight face that the crisis was not caused by liberal interference wit the free market.


Fannie and Freddie had purchased $4.9 trillion of the mortgages outstanding as of the end of 2007, 70% of which the GSEs had packaged and sold to investors with a guarantee of payment, and the remainder of which Fannie and Freddie kept for their own portfolios. The fraction of outstanding home mortgage debt that was either held or guaranteed by the GSEs (known as their "total book of business") rose from 6% in 1971 to 51% in 2003. Book of business relative to annual GDP went from 1.6% to 33%.