Comments on: Professor Danger http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/ Random samplings from a universe of ideas. Mon, 09 Nov 2009 08:00:03 -0600 http://wordpress.org/?v=2.8.4 hourly 1 By: Sean_M http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/comment-page-1/#comment-43744 Sean_M Thu, 02 Oct 2008 15:36:21 +0000 http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/#comment-43744 This is one of the best overviews of the financial crisis I've seen yet: http://www.factcheck.org/elections-2008/who_caused_the_economic_crisis.html It makes the more believable statement that there is plenty of blame to go around. Here is a list: # The Federal Reserve # Home buyers # Congress # Real estate agents # The Clinton administration # Mortgage brokers # Former Federal Reserve chairman Alan Greenspan # Wall Street firms # The Bush administration # An obscure accounting rule called mark-to-market # Collective delusion This is one of the best overviews of the financial crisis I’ve seen yet:
http://www.factcheck.org/elections-2008/who_caused_the_economic_crisis.html

It makes the more believable statement that there is plenty of blame to go around. Here is a list:
# The Federal Reserve
# Home buyers
# Congress
# Real estate agents
# The Clinton administration
# Mortgage brokers
# Former Federal Reserve chairman Alan Greenspan
# Wall Street firms
# The Bush administration
# An obscure accounting rule called mark-to-market
# Collective delusion

]]> By: Sean_M http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/comment-page-1/#comment-43743 Sean_M Thu, 02 Oct 2008 14:32:18 +0000 http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/#comment-43743 Reed Miller, I'm all for discouraging predatory lending practices. However, we need to be sure that we get to the true root of the problem be that lack of regulation and transparency or enabling and encouragement as a result of legislation. In fact, objectively determining the cause of the crisis and fixing it is more important long term than the bailout passing or not. Reed Miller, I’m all for discouraging predatory lending practices. However, we need to be sure that we get to the true root of the problem be that lack of regulation and transparency or enabling and encouragement as a result of legislation. In fact, objectively determining the cause of the crisis and fixing it is more important long term than the bailout passing or not.

]]> By: Reed Miller http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/comment-page-1/#comment-43742 Reed Miller Thu, 02 Oct 2008 12:59:24 +0000 http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/#comment-43742 Blaming a failure of capitalism and free-market economics is not mutually exclusive with blaming the government for a failure of regulation. You're absolutely correct with your earlier comments regarding a proper balance of intervention and noninterference, however it does not mean that we should accept the predatory nature of capitalism and the irresponsible behaviors of lenders and financial institutes on the basis of "the government should have done a better job regulating them", regardless of how true the statement is. Blaming a failure of capitalism and free-market economics is not mutually exclusive with blaming the government for a failure of regulation. You’re absolutely correct with your earlier comments regarding a proper balance of intervention and noninterference, however it does not mean that we should accept the predatory nature of capitalism and the irresponsible behaviors of lenders and financial institutes on the basis of “the government should have done a better job regulating them”, regardless of how true the statement is.

]]> By: Sean_M http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/comment-page-1/#comment-43741 Sean_M Thu, 02 Oct 2008 03:14:43 +0000 http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/#comment-43741 Chris W., If it were my bank, I would not want to lend money to high risk borrowers... You seriously aren't gonna place any blame on crappy government regulation and Congress for this??? Chris W., If it were my bank, I would not want to lend money to high risk borrowers… You seriously aren’t gonna place any blame on crappy government regulation and Congress for this???

]]> By: Chris W. http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/comment-page-1/#comment-43763 Chris W. Thu, 02 Oct 2008 03:04:22 +0000 http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/#comment-43763 <em>Is it possible that FNMA failed because of liberal policies being forced on it since the Carter Administration. By liberal policies I mean the government coercion and requirements to provide high risk loans to lower income buyers.</em> Oh yeah, Sean_M, I can picture all those grim-faced subprime lenders grudgingly approving those documentation-free loans to undeserving low-income home buyers. They really didn't want to do it, but the government <em>made</em> them. I guess we owe them an apology. If y'all haven't heard it before, listen to This American Life's <a href="http://www.thislife.org/Radio_Episode.aspx?episode=355" rel="nofollow"><b>The Giant Pool of Money</b></a>. Investors were looking for a "safe" alternative to low-yielding U.S. Treasuries (under Alan Greenspan's Fed) and Wall Street delivered, and delivered, and delivered... (TAL has a follow-up coming <a href="http://www.thislife.org/Radio_Episode.aspx?episode=365" rel="nofollow">this week</a>.) Is it possible that FNMA failed because of liberal policies being forced on it since the Carter Administration. By liberal policies I mean the government coercion and requirements to provide high risk loans to lower income buyers.

Oh yeah, Sean_M, I can picture all those grim-faced subprime lenders grudgingly approving those documentation-free loans to undeserving low-income home buyers. They really didn’t want to do it, but the government made them. I guess we owe them an apology.

If y’all haven’t heard it before, listen to This American Life’s The Giant Pool of Money. Investors were looking for a “safe” alternative to low-yielding U.S. Treasuries (under Alan Greenspan’s Fed) and Wall Street delivered, and delivered, and delivered…

(TAL has a follow-up coming this week.)

]]> By: Sean_M http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/comment-page-1/#comment-43762 Sean_M Wed, 01 Oct 2008 20:46:15 +0000 http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/#comment-43762 So, why specifically do Democrats site the repeal of the Glass-Steagall Act as the reason for the current financial crisis? Bill Clinton claims the repeal has helped to lessen the blow... http://hotair.com/archives/2008/10/01/the-glass-steagall-dodge/ So, why specifically do Democrats site the repeal of the Glass-Steagall Act as the reason for the current financial crisis? Bill Clinton claims the repeal has helped to lessen the blow…

http://hotair.com/archives/2008/10/01/the-glass-steagall-dodge/

]]> By: Sean_M http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/comment-page-1/#comment-43761 Sean_M Wed, 01 Oct 2008 20:31:34 +0000 http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/#comment-43761 Hum, did a little research... How does the failure of a government created and ran entity "Federal National Mortgage Association (FNMA), commonly known as Fannie Mae" reflect poorly on free enterprise and not the government. Is it possible that FNMA failed because of liberal policies being forced on it since the Carter Administration. By liberal policies I mean the government coercion and requirements to provide high risk loans to lower income buyers. Econ 101 would say that increasing demand for homes will inflate house prices (the bubble). Common sense says that when the bubble bursts and FNMA is sitting on a bunch of high risk loans that there will be trouble. Maybe Bush and Clinton have more common sense than all of the knuckle heads in Congress! Hum, did a little research…
How does the failure of a government created and ran entity “Federal National Mortgage Association (FNMA), commonly known as Fannie Mae” reflect poorly on free enterprise and not the government. Is it possible that FNMA failed because of liberal policies being forced on it since the Carter Administration. By liberal policies I mean the government coercion and requirements to provide high risk loans to lower income buyers. Econ 101 would say that increasing demand for homes will inflate house prices (the bubble). Common sense says that when the bubble bursts and FNMA is sitting on a bunch of high risk loans that there will be trouble. Maybe Bush and Clinton have more common sense than all of the knuckle heads in Congress!

]]> By: Sean_M http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/comment-page-1/#comment-43760 Sean_M Wed, 01 Oct 2008 19:39:14 +0000 http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/#comment-43760 I would like to make a few points regarding free markets, capitalism, and financial institutions... 1. There is no economy in the world that is a pure free market. Virtually all economies are mixed economies. Capitalist economies, like our own, are mixed economies where free markets are predominant. 2. Capitalism appears to be superior at building wealth and maintaining growth in countries when compared to planned economies. This conclusion is based on the outcome of the cold war and it's successful application in places such as China. The amount of market freedom and regulation will always be a point of debate but I don't think there will ever be a successful economy that is purely planned nor purely free market. We just have to decide what amount and type of regulation is necessary. 3. It seems to me that the recent financial fiasco is less a failure of capitalism, and more of an indication that we need to seriously reconsider the system relating to regulation of financial institutions. Free markets require transparency and proper regulation of financial institutions should provide that transparency. Regardless of the action taken, our economy is correcting, and hopefully regulation will be enacted to prevent this type of collapse from occurring again. Of course, memory is short and I'm sure in another generation something similar will happen again... Life just isn't easy and nothing runs perfectly with 100% efficiency! I would like to make a few points regarding free markets, capitalism, and financial institutions…

1. There is no economy in the world that is a pure free market. Virtually all economies are mixed economies. Capitalist economies, like our own, are mixed economies where free markets are predominant.

2. Capitalism appears to be superior at building wealth and maintaining growth in countries when compared to planned economies. This conclusion is based on the outcome of the cold war and it’s successful application in places such as China. The amount of market freedom and regulation will always be a point of debate but I don’t think there will ever be a successful economy that is purely planned nor purely free market. We just have to decide what amount and type of regulation is necessary.

3. It seems to me that the recent financial fiasco is less a failure of capitalism, and more of an indication that we need to seriously reconsider the system relating to regulation of financial institutions. Free markets require transparency and proper regulation of financial institutions should provide that transparency.

Regardless of the action taken, our economy is correcting, and hopefully regulation will be enacted to prevent this type of collapse from occurring again. Of course, memory is short and I’m sure in another generation something similar will happen again… Life just isn’t easy and nothing runs perfectly with 100% efficiency!

]]> By: Lawrence B. Crowell http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/comment-page-1/#comment-43759 Lawrence B. Crowell Wed, 01 Oct 2008 03:12:05 +0000 http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/#comment-43759 Sorry, I meant to say the Republicans are not soley to blame. The French found a marvelous instrument to take care of politicians --- called the guillotine :-) L. C. Sorry, I meant to say the Republicans are not soley to blame.

The French found a marvelous instrument to take care of politicians — called the guillotine :-)

L. C.

]]> By: Sean_M http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/comment-page-1/#comment-43758 Sean_M Wed, 01 Oct 2008 02:00:03 +0000 http://blogs.discovermagazine.com/cosmicvariance/2008/09/29/professor-danger/#comment-43758 Well Lawrence, I'm glad you are at least open minded enough to admit it's not "completely" the Republicans fault... ;-) It seems that the partisanship has been steadily escalating in the U.S. for some time now. In my opinion, it has reached a point where people cannot and will not even try to see the other side's point of view. I think both parties have been able to find issues that resonate to a high degree with their constituents and have convinced them that the other side will bring certain doom to the country. Both sides are to blame and until the American people step back and take a breath, it won't end. When I see so many intelligent people holding such widely opposing views, it's hard to even trust my own judgment. I'm not sure that isn't a healthy thing because I know very very very few people who are not absolutely sure that their political point of view will bring utopia on earth. It's as if most Americans have either replaced their religion with or integrated it into their politics. People seem to approach it with that kind of fervor. They even have different apocalyptic prophesies and claim to be the salvation of the country while the opposing party is pure evil. Will it come to religious/civil conflict like that between catholics and protestants in Europe? The two parties have virtual monopolies against which any third party cannot stand. The parties have their own media machines and outlets. I guess after they drive the country into the ground we may decide to be rid of them. Well Lawrence, I’m glad you are at least open minded enough to admit it’s not “completely” the Republicans fault… ;-)

It seems that the partisanship has been steadily escalating in the U.S. for some time now. In my opinion, it has reached a point where people cannot and will not even try to see the other side’s point of view. I think both parties have been able to find issues that resonate to a high degree with their constituents and have convinced them that the other side will bring certain doom to the country. Both sides are to blame and until the American people step back and take a breath, it won’t end.

When I see so many intelligent people holding such widely opposing views, it’s hard to even trust my own judgment. I’m not sure that isn’t a healthy thing because I know very very very few people who are not absolutely sure that their political point of view will bring utopia on earth.

It’s as if most Americans have either replaced their religion with or integrated it into their politics. People seem to approach it with that kind of fervor. They even have different apocalyptic prophesies and claim to be the salvation of the country while the opposing party is pure evil. Will it come to religious/civil conflict like that between catholics and protestants in Europe? The two parties have virtual monopolies against which any third party cannot stand. The parties have their own media machines and outlets. I guess after they drive the country into the ground we may decide to be rid of them.

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