What's wrong with the economy and how to fix it

Roger Farmer, UCLA professor of economics, discusses why we should develop a new institution, like the Federal Reserve Board, with the mandate to prevent bubbles and crashes in the stock market.

Category:

News & Politics

Tags:

• UCLA
• Newsroom
• News
• Economy
• bailout
• recession
• stock
• market
• fannie
• mae
• freddie
• mac
• AIG
• bank
• housing
• mortgage
• bankruptcy

[jlr92958]

We have tried almost everything, nothing seems to work; what we have not tried are salary cuts for those earning above the $250,000 level; Everything else works for a while, then back to the problem. The problem we have is Exec. salaries have gone up faster than the middle-class, so they have to get paid; the money to keep people working, give better health Insurance, and retirement benefits is going into the pockets of the well off. Tax cuts, not the solution; we have tried them. Salarycutsdo.

[iflyboats]

"Experts" like this are the reason our society is collapsing.

[mba2ceo]

Stock market = CASIO

Just my opinion

[jnadreth]

And whats to stop FED 1 from taking over FED 2?....Also he is saying that we need more govt control of the market?....The Soviet Union tried that and look what happened there ;)

[chase0813]

you are completely wrong.

My name is Chase Devore and I want you to remember my name because 8 years from now im going to be the biggest name you will hear of. all my ideas equal out and i know how to get out of this i just need to get out of sadly highschool and collage but i know what im doing.

[trent2429]

It amazes me that economic experts can "learn" their way into advocating things like bailouts, centrally planned interest rate price fixing, fiscal "stimulus", fiat paper money, socializing, nationalizing, subsidizing, and regulating everything under the sun. And then they claim to be capitalists while blaming the market for the failure of their own interventions! It's appalling.

If the academics and government in this country would just laissez-faire, the market would solve our problems.

[clintdanz]

Why are people railing against socialism........could it be any worse for the majority of the people than we are in now?

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[doford]

The only problem is that if "fed 2" controled all wealth then they would sink ALL of our wealth, not just paper money, into a giant hole like the fed and other central banks have done.

I hope this guy understand quick that his thinking is no different to socialism or economic facism. If you like owning your car or your home you should really think how important property rights are.

To make it simply for you will you give me ownership of all your wealth so i can invest it? Do you trust me?

[EnriqueRealtor]

Professor, I'm sure you're aware of the following but I'd appreciate your reply:

1)Sub-Prime mortgages defaulted mainly because the Margins were excessive. A typical Margin on an "A" Paper loan is between 2.0% and 2.5%. On Sub-Prime, they are the original Start Rate (5.5% to 8.5% or higher). Had these Margins been 3.0 to 4.5%, we'd have a soft landing.

2)Sub-Prime Lenders purposely split 100% financing (80/20) to avoid Mortgage Insurance. Now they want the benefits of "Insurance" - Bailout.