You folks keep saying this and yet? When there is major economic turmoil in this country? It generally starts in the Stock Market.
Now why is that? Could it be there a huge tie in between banks (Savings) and financials (investment)? Could it be that when the market goes south, credit freezes up?
Real wealth (the stuff outside of money) is acquired in several ways.
You grow it.
You mine it.
You produce it.
You service it.
And America wasn't suffering a large scale decline in any of those things during the great depression and the Bush cataclysm.
What did happen?
The stock market crashed and banks were failing.
That dried up credit and investment. And led to massive unemployment.
Your argument here is laughable at best.
This is what bugs me about this argument. This is just more proof, the left is who supports big bankers the wealthy, the CEOs the rich and powerful.
Do you not realize that what you said is exactly what the banks, and wealthy people, WANT you to believe?
What you just spelled out, is the exact rationalization to justify "too big too fail".
If I was in a major industry of any kind, and I wanted the government to bail me out whenever I made a mistake, the best way to do that is to convince the public, and government, that without me and my industry, the entire country will end in depression, if you don't save my butt.
That's exactly what you tried to outline here. The Big Banker Credo. What happened? The stock market crashed, and let's not determine why. Banks were failing, and let's not determine why. And because of that, credit dried up. And because of that investment dried up. And because of that, massive unemployment.
There you go... let's institute 'too big too fail', and bailout all the banks, and pay off all the wealthy rich people, because we don't want banks to fail, because we don't want credit to freeze, because we don't want investment to dry up, because we don't want massive unemployment.
Party of the Rich, at your service!
FAIL! I completely don't buy any of this.
Banks do not CAUSE the economy. Banks RESPOND to the economy. The stock market equally, is almost always a reflection of the economy, or a reflection of future economy issues. It does not cause either.
If a business is successful and growing, it's not possible for the stock price dropping, to cause the business to fail. Equally, if the business is failing, it's not possible for the stock price increasing, to cause it to become profitable again. In fact, Enron was a great example of that. Stock prices near the end, were still going up, even though they were losing money.
Equally, if my mortgage is with Countrywide, and Countrywide goes bust, that doesn't harm me. My mortgage will simply be sold off to another bank, and I still pay it, and keep my house.
Credit drying up, is not a problem, if your business is successful. In every recession, people complain about credit drying up. Credit is not drying up. The number of credit worthy borrowers is drying up, because there is an economy down turn.
If your business starts losing money every month, yeah, the bank isn't going to give you a loan. It's not because 'credit dried up!', it's because you are bad risk. You are losing money every month. You think giving a failing business, increased overhead cost with interest payments, is going to save the business? No, it will just sink the business faster, and the bank will lose all it's money.
At the same time, Investment doesn't dry up because of banks. Investment dried up because in a down economy, there were fewer worthy investments.
There are dozens, if not hundreds of businesses, that were started, expanded, and grew all throughout the recession. They got plenty of investment, because they were growing and successful. There were fewer, that's true.... because the economy was bad. Simple as that.
The real answer is this.
The downturn in the economy was due to the minimum wage, and bad government regulation.
The crash in the mortgage market, and the housing price bubble crash, was due to bad government regulation and policy pushing bad sub-prime loans.