If they could be independent of Europe and the world, possibly this would be the case, but unfortunately they are completely dependent, so will suffer in the same way. Take for example the recent event of Swiss Banks being forced to give Governments outside Switzerland access to the names of their clients. World has become too small for Switzerland to still carry on as it has before.
While I agree that both did play a role in this, one thing that needs to be understood is that the market bubble caused by the CDOs was natural and it would've happened no matter how much regulation you had, so long as there was still a market-based economy system. This is because, as with any new product, overconfidence is always apparent at first as people get excited over the prospect of a new way to make money- examples of this are seen throughout the course of history from the invention of cars and planes (at first there were hundreds of companies selling both [respectively], until competition obviously cut it down to the handful we have today) to the tech bubble.
In today's age of information a lot of people do know that they shouldn't be eating rotten meat or be buying fishy-looking pills. If they still want to buy it, it is their choice to do so. Anyway, you are getting more on the topic of the FDA instead of our original point of discussion which was around drugs. With all of these regulations the government only drives up drug prices and in the end a lot of people can't even afford them.
They aren't going to come out ahead. I don't know where you read that or how you came up with it, but it just isn't true. The countries that will come out with the least damage are going to be China and India, both which weren't so entangled in the American mortgage market and both who have great/growing manufacturing sectors.
Well the SEC and Federal Reserve failed to see anything wrong happening- there is your big government efficiency for you. The government needs to focus more on oversight and making institutions like the SEC more efficient instead of regulating because oversight does not hurt the markets- regulation does. As for the MBS bubble, the government backed mortgages, so more mortgages were made and that made the bubble bigger.
Well, if they get duped into buying it then that is their fault. You should have the knowledge not to eat rotten meat. Even with the FDA and things, people still get food poisoning because of things like eating bad meat. At the end of the day I believe it is one's personal responsibilty to look out for themselves, not the government's.
I did not make a case against the FDA, although I think the system does need to be restructured and improved. You are mixing up the FDA with the regulations I was referring to, which are things like taxes and price controls on drugs as well as excessive checks.
Again, I am referring more to the corporate regulations than the actual health ones. Even in the health ones though, some programs are very inefficient and unnecessary.
. Whoops. I disagree and personally think that the FDA needs more power to regulate meat...but that is another thread entirely and one I'd need to do new research on, especially for medical testing
What deregulation are you referring to? Please give me examples. Even before this "deregulation" the Fed and SEC were not competent at doing what they were supposed to do, so you can't really say deregulation made them miss this. The SEC does need to be overhauled and a new system needs to be set up for fraud monitoring. Either that, or end the SEC and start a better system of fraud oversight. The Federal Reserve on the other hand doesn't need to be overhauled, it just needs to be shut down. It has not helped this country in any way since its creation in 1913. In fact, it has made things worse with the bubbles and distortions.
The government did back these loans, what do you think Fannie and Freddie do? Not only that, but Fannie and Freddie even dipped into the MBS market and bought some CDOs. None of this should have happened because Fannie and Freddie should never have been owned by the government. As for the liquidity that drove this bubble to its peak- what do you think caused it to inflate so much? It was the Federal Reserve's "loose money" policy and the governments willingness to prop up bad debt through Fannie and Freddie.
I am aware of the Jungle, but information is a lot easier to come across nowadays and this is a lot less likely to happen. Also, I think oversight is ok, especially at the state and local levels- it is the regulations that really hurt the markets.
A European still has to worry about taxes- a lot of socialists seem to forget that. And what about all of the deadweight losses you are creating with these taxes and socialized programs? All of that will lead to less growth in the long run. A free market, on the other hand, is a lot better at having more growth in the future at a sustainable rate.
This sort of thinking is very short-sighted. Sure, in the short run socialism may be better, but if you look at the long run you will see that capitalism and the lack of socialism is what is more sustainable and creates more prosperity. It is socialism that has created all of these bubbles and recessions in this past century so bad. As for the people in China and India, you really need to look at the history of why those people are like that. First of all, conditions are getting better drastically in both countries. Second, the reason that India has so much poverty is because of the very socialist policies it had from the 1950s to 1980s coupled with the aftermath of freedom from Britain. As soon as they ditched those policies, growth and conditions started to get better. As for China, the reason their conditions are bad in some places is because the government is communist politically. The lack of freedoms is what lets the government oppress the people and leads to these conditions. Want another example? Look at what Japan did around 1990 when they were in a crisis very similar to ours and look how that turned out. Another one? The Soviet Union. Look at history and tell me where socialism works. Can't? Because in the long run it never does.
Well the SEC has failed to do its job. Even if it can't do anything to stop the CDOs from being created and sold, it should have still caught it simply because it was still overseeing those parts of the market. A warning should have been given at how dangerous those assets were, yet the SEC failed to even realize it.
But is mortgage lending the job of the SEC? I would have thought it would have been the Federal Reserve Bank:
The SEC still should have seen this problem coming because it was so huge and the buyers of CDOs had no idea what was even in them (some of the banks selling them didn't either.)
And how do you propose they do that? It is easy to say this should have been regulated or that should've been stopped, but it is a lot harder to come up with an efficient solution that can actually do those things.
I think we have argued that before. And you have a very strong position on it too. We have to have less interference in the economy by Government. More regulation means more Government. Bail-out means more Government. The brief of the SEC as far as I can understand did not include banking or real estate deals. Easy for Banks/Government to try and blame it on the SEC. SEC investigations usually starts with a complaint being lodged, before they can investigate. So someone from the Banks/Government would have had to have lodged a complaint with the SEC, can you see that happening?
I can't agree with this. This sounds quite farfetched Not to mention a gigantic insult to those agencies that you are referring to, especially the SEC, which is known and respected as one of the best forensic investigators in the world. Bush has never been a dictator, nor did he act alone, as far as I know the United States is a democracy, not an autocracy. Next thing you're going to say Bush was responsible for the Big Bank debts as well! How about the Big Banks being made responsible for the debts that they signed off for, including the enormous bonusses executives are paying themselves? Instead of trying to blame all the agencies? As far as I know the same management reponsible for those failing banks are still firmly in their jobs, and not much said about them not their compliance officers?
The SEC can start its own investigations and it is responsible for regulating and enforcing laws concerning various types of securities including stock and option exchanges. The CDOs and MBS were subject to SEC oversight, the SEC simply failed to do its job. In a situation as big as this one, complaints are not something that they can use as an excuse because if they just looked at loan levels and the types of loans being made to certain people, it was obvious that a lot of them would eventually default when the housing market went down. If they seriously thought the housing market was not ever going to go down, then that is even worse. No matter what excuse is made, the SEC takes some of the blame for this and they did fail to do their job.
Where did you get this idea? Please provide proof before making ridiculous and absurd claims such as these. Also, please note that this crisis was in the making longer than the time Bush was in office. It spanned back several years including into the Clinton years.
Again, why don't you give me examples and support your claim? Blindly saying things such as this adds nothing to your argument and only hurts your ethos.
