PJTV: The Government Caused the Financial Crisis, Not Greed

John Allison, the former CEO of BB&T, tells Glenn Reynolds how the government and the Federal Reserve caused the financial crisis. Why are politicians and academics still adhering to failed Keynesian economics? Is a private banking system based on the gold standard the answer? Find out.

Category:

News & Politics

Tags:

• banks
• mortgage
• housing
• monetary
• money
• paper
• wealth
• interest
• fed

[wfoddis]

@TrollBuster9090 If avoiding the question is the best you can do, then all I can do is call a spade, a spade. Have you read Norberg's book?

[TrollBuster9090]

@wfoddis

Ad hominem is the best you can do?

Okay, whatever floats your boat.

[wfoddis]

@TrollBuster9090 Some people would rather believe their knowledge is 100% true rather than taking the effort to read something that might expand on their knowledge. Your first sentence--"Government is not the problem."--gives away your conclusion and suggests to me that you are closed-minded about hearing anything different than your own story. If you read Norberg's book and come away with the exact same understanding that you currently believe, I will be shocked and awed.

[TrollBuster9090]

@wfoddis

Government is not the problem. Corporate ownership of government is the problem. As I said in an earlier comment, Fannie Mae was a wholly controlled government agency for 30 years, and it did an excellent job. It only became a menace a) after it was privatized and had the ability to lobby (aka bribe) Congress, and b) Gramm-Leach and CFMA created a moral hazard by allowing the creation of CDOs.

[wfoddis]

@TrollBuster9090: Have you read Johan Norberg's "Financial Fiasco?" The functions and goals of Freddie Mac and Fannie Mae, in addition to the role of the Fed, and most pernicious of all, the government policy that sets the rules for sub-prime housing market were all huge causal contributions to financial crisis. To simply let government off the hook as "rich parents" shows a misunderstanding of the government's culpability in this mess. Norberg also discusses the recklessness of Wall Street.

[antimarxism]

@TrollBuster9090 2. Of course you cherry-pick pissant tiny homogenous boutique countries as an example of "why socialism works".

Debunking your naive examples has been done ad nauseum.

[TrollBuster9090]

@antimarxism

I'm surprised you don't get hey fever building all those straw men.

1. Right on the first two statements, but leftists would NOT say the subprime mortgage crisis happened because they didn't give out enough bad loans.

2. Euro-socialists are doing pretty well. I'd take the standard of living of a middle class Swede, Norwegian, German or Dutchman over the overworked, underpaid American middle class anyday.

[TrollBuster9090]

@wfoddis

If you've been to college you'll know that credit card companies hard sell credit cards to teenage college students with no credit rating. (Stacks of card applications in the bookstores etc.) They hard sell credit cards to free-spending teenagers with no credit history because there is an "implicit guarantee" that if they default the (wealthy enough to send their kids to college) parents will pay.

So, if the kid defaults, are the parents to blame, or the credit card company?

[wfoddis]

Quoted from wikipedia.

[wfoddis]

@TrollBuster9090 : They are government-sponsored enterprises "[whose] securities carry no explicit government guarantee of creditworthiness, but lenders grant them favorable interest rates, & the buyers of their securities offer them high prices. This is partly due to an "implicit guarantee" that the government would not allow such important institutions to fail or default on debt. This perception has allowed Fannie Mae and Freddie Mac to save an estimated $2 billion per year in borrowing costs"