On Sun, Aug 2, 2009 at 10:35 PM, Craig White<craigwhite@azapple.com> wrote:
> On Sun, 2009-08-02 at 21:43 -0700, Eric Cope wrote:
>>         I would examine the "free market" again. We are /not/ in a
>>         free market,
>>         and haven't even been close to one for a while. We never
>>         deregulated
>>         anything, indeed, the pages of regulation haven't decreased
>>         since Regan.
>>         Greenspan turned out to be one of the biggest
>>         interventionists, only
>>         outdone by Bernanke. You can't blame the mess on bankers, if
>>         they didn't
>>         make those decisions someone else would have, and the outcome
>>         wouldn't
>>         have been any different (in other words, it is a symptom, not
>>         a cause).
>>         The problem stems from many central banks including our own
>>         Federal
>>         reserve cutting interest rates from 2001-2004 by (essentially)
>>         "printing" money. Since the housing market was one of the most
>>         regulated
>>         (that is to say, there were government-enforced lending
>>         standards and
>>         intervention my Fannie and Freddie), so people spent that new
>>         money on
>>         houses before anything else (Oil too, because energy is
>>         closely tied to
>>         the market), drove prices up, created a misallocation of
>>         capital
>>         disproportionate with consumer demand, and we crashed when not
>>         enough
>>         people could humanly gather the money to buy a new house at
>>         the price
>>         they were at.
> ----
> no, there was no growth in anything but property values because the
> stock market was stagnant. The housing bubble was driven by escalating
> prices driven by investor purchases of housing which was completely
> unsustainable. The economy of 2000 > 2006 was a false bubble of real
> estate growth.

  no, it was driven by high availability of housing credit.  See:
Casey Serin.  These 'investors' were too dumb to figure out everyone
else is also an investor and everyone can't be a winner.  Oh well, a
fool and his money are soon parted.

>
> To suggest that Greenspan was an interventionist means that you don't
> believe in his love for Ayn Rand and all of his efforts at deregulation.
> Things like deregulating the firewalls between banks and investment
> houses. You can find the origins of this in the Graham-Leach act of 1999
> which repealed the Glass-Steagall act.

  this particular thing can only be classed as sabotage- the financial
people knew what the effect would be and the public was warned.  I
have a very hard time believing that the upper ups didn't see this
coming.  They have access to income figures and generally know the
ability of Americans to service their debt.  Perhaps they can't
predict everything but it should have been clear 3 years ago that we
had a big problem.  It sure was for me as many of you know.  -jmz

> This was free market failure at
> its best. Free market thinking is about corporate failure. Free market
> economics is now officially dead.
>
> Craig
>
>
> --
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