Economists warn of impending doom!
I don’t really have the time to do this column justice.
In the report, the panel, which includes Rob Johnson of the United Nations Commission of Experts on Finance and bailout watchdog Elizabeth Warren, warns that financial regulatory reform measures proposed by the Obama administration and Congress must be beefed up to prevent banks from continuing to engage in high-risk investing that precipitated the near-collapse of the U.S. economy in 2008.
The report warns that the country is now immersed in a “doomsday cycle” wherein banks use borrowed money to take massive risks in an attempt to pay big dividends to shareholders and big bonuses to management – and when the risks go wrong, the banks receive taxpayer bailouts from the government.
“Risk-taking at banks,” the report cautions, “will soon be larger than ever.”
Without more stringent reforms, “another crisis – a bigger crisis that weakens both our financial sector and our larger economy – is more than predictable, it is inevitable,” Johnson says in the report, commissioned by the nonpartisan Roosevelt Institute.
This is the problem with Government intervention in the Economy. It creates Moral Hazard. When you socialize the loses, no one learns anything. The Banks certainly don’t, except that the next time they are about to go belly up, the Government, in it’s infinite wisdom, will be there to bail them out again. It creates an endless cycle of bailouts. We have become a Bailout Nation.
Meanwhile, the “best and the brightest” who didn’t see this coming are trying to tell us that we need more regulation. We don’t need more regulation, we need to stop Bailing Out Bankrupt institutions!
They are bankrupt for a reason. They suck! They made bad bets. They were run into the ground by shitty management. No matter what, they need to fail. They need to be made to learn the consequences of their actions.
So why do the “best and the brightest” keep on saying that what we need is more regulations and government control?
I think the simple answer is clear, they see themselves as the regulators. They think they are the ones smart enough to protect the unwashed masses from danger.
In the report, Elizabeth Warren, who was chair of the Congressional Oversight Panel, reiterates her calls for an independent agency to protect consumers from abusive Wall Street practices.
Who do you think Mrs Warren would like to be in charge of this “independent agency?” Five points if you say, Elizabeth Warren.
How well did the last round of regulators do? Don’t let the Liberal lie fool you, they were plenty regulated. They were regulated by multiple agencies like the SEC and the Fed. How well were they at spotting the bubble as it was forming?
Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.
U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke, currently chairman of the president’s Council of Economic Advisers, in testimony to Congress’s Joint Economic Committee. But these increases, he said, “largely reflect strong economic fundamentals,” such as strong growth in jobs, incomes and the number of new households. – October 27, 2005
Yes, that’s the same Bernanke that is in charge of making sure it doesn’t happen again. Has he learned anything? No, since he is intent on keeping interest rates low “for the foreseeable future.” But, it was low interest rates that caused the bubble to form and prolong it in the first place.
So now the bubble has burst, has anyone learned anything? No
Who ultimately pays for it all? The Taxpayer
Meanwhile, firms like AIG are still around, even though they should have gone belly up. They know they will be bailed out again and again. They will continue to do the same reckless things that got us all in trouble in the first place.
Stop the Bailouts!
Vote out every single one of the politicians that voted for the bailout, Democrat and Republicans!