Comments about ‘Blame regulation, not greed’

I believe Professor Horwitz is saying government caused the current finacial crisis. I'll concede that government did little to prevent it, but history shows that speculative manias are just part of the capitalist system. Were the manias of 1873, 1893, 1907, and 1929 caused by government? Obviously not, and most of our probelms are simply coming out of the system itself.

to make sure I got the message right. It's baloney. All of it. It is indeed greed, of many institutions, businesses, and individuals that got us into the mess. DEregulation, and the lack of effective oversight on the regulation that was in place is next to blame.

Finally people are beginning to figure out what
happened. Affirmative Action in the houseing market. What the press is not willing to tell you is what political party pushed it. That particular party also locked up our natural resources. The results of 1990 politics have finally come back to
haunt us.

Actually Lew, all of those *were* caused by various and sundry government regulations, either the ones associated with the pre-Fed National Banking System in the first three cases, or with the Fed and the interventionist mistakes of Hoover and FDR in the fourth.

The 19th century panics were mostly the fault of regulations that forced banks to buy government bonds in order to issue currency, which had the effect of raising the cost of supplying currency when the demand rose, leading to an under-supply.

The Great Depression was a combination of Fed inflation in the 1920s and then its unwillingness to provide liquidity after the crash, combined with regulations preventing branch banking (leading to the numerous bank failures) and Hoover & FDR's misguided attempts to maintain wages in the face of a deflation. I could add the Smoot-Hawley tariff as well. All of these are government interventions that are responsible for the episodes you mention.

Your "obviously not" is not enough of an argument to make your point.

The big lie in all of this is that the government caused the free market to fail. In truth the reason was the unscrupulous greedy big business men paid for and obtained the actions of the government to accomplish their goals.

Every action, law, event that the government creates is done at the prodding of someone in the private sector that has the money and influence to change the rules in their favor. And in every case the object is money and wealth. Or what is commonly known as greed for money and wealth.

So when someone says that greed is not the reason, they are not being honest with themselves or us.

We are about to reward the party most resposible for this meltdown by giving them total control of the Government. The electorate is easily duped.

Professor Horowitz is factual and actual whether you want to accept it or not. I was an investment banker in the mortgage capital markets in the 80s. My son owned a mortgage company in the 90's, we moved entirely to commercial real estate loans in 1999. Absolutely no interest in the quagmire of B paper or later called subprime. Good decision, on our part. Other mortgage brokers and banks moved to the new playing field designed by politicians through their surrogates Fannie and Freddie. The outcome was overinflated housing because of the a flood of new buyers, esoteric financial instuments and speculation on a broad scale. In all though, only 5% of underlying mortgages are delinquent and 1.94% are in default. People will try to hold onto those homes no matter what, and eventually the burst bubble will make it's way through the system, but expect further manipulation of markets by political entities and further dislocation of natural market influences.

Finally, the DN printed something factual about the economic meltdown. Lew, you have it exactly wrong again. Your so-called "historical analysis" comes directly from "Das Kapital" by Marx. He had it 180 degrees wrong, and I'm afraid you do, too.

Yes, government often is unhelpful to say the least, but is Professor Horwitz saying that speculative manias aren't part of the capitalist system, i.e. that if weren't for government it would run like a well oiled clock without crisis? I doubt it. But then this gets to one's theoretical perspectives.

You know, when all of this mess started, I began to do a little research. One of the sites I frequent is the FDIC web site. One of the most prominent regulatory actions that it takes is a "Community Reinvestment Act" compliance audit. If this is so heavily enforced, no wonder banks had to make bad loans. And then, while the bubble formed and floated, everyone reasonably jumped on the bandwagon, often stretching things with some fraud (yes this is the home I'm going to live in!-for a 3rd primary residence). Then the professionals got involved-Franklin Squires, et al. Even organized crime found that it pays. Of course the end came. But truely the genesis could in substantial part be blamed on the CRA and its heavy handed enforcement. I agree with the article.

To remedy the problem, buck up and deal with the pain. We need to transition back to a pay as you go society, and not continue living beyond our means. We should NOT be trying to preserve our regular debt based living.

One of the major problems with our market and economy is the weakness of our educational system consisting of profesors who lack learning and understanding and pass their incompetence onto the student. We need smart people teaching us to be smart; not dumb people instructing us on how to be even dumber.

CRA: That's Franklin Raines, not Squires. He was a former economic advisor of Pres. Clinton before taking over Fannie Mae.

But it seems to me that the main problem, in a nutshell, nationally and globally, is that too many people are spending money they don't really have. Debt, credit, debt, credit, debt, credit............
Companies have gotten so BIG and FAT that they can't sustain themselves on actual money. It is just a boatload of "securities" and "investments" and I.O.U.'s. that get traded around in an insane game of pass-the-buck and fake-it-till-you-make-it. Except nobody is actually making it. We need MORE regulation, not LESS! Big-time, corporate capitalism is like a giant goldfish that will continue to gorge itself with debt and credit spending until it dies. Applying the defibrilator (bailout) over and over again is doing favors for nobody except the fish. We need to curb the food intake (regulation), not continue to feed it all it wants, because it is insatiable and will not stop even if its long-term best interests and the interests of the general population are at stake.

..and it may be wrong. It all comes down to what you believe a proper set of "rules of the game" consists of. Rules, frankly, are regulations. It isn't a matter of pure regulation or de-regulation, because both could cause harm depending upon the "rule" in question.