US Slides Into Dangerous 1930s 'Liquidity Trap'

[go west young man]

Joseph Stiglitz puts the blame where it belongs.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/01/24/bcnstig124.xml&CMP=ILC-mostviewedbox

Professor Stiglitz blamed the whole US economic establishment for failing to regulate the housing and credit markets adequately, allowing huge imbalances to build up.

"The Federal Reserve and the Bush Administration didn't want to hear anything about these problems. The Fed has finally got around to closing the stable door (on subprime lending), but the after the horse has already bolted," he said.

[ursi]

1. ...and the big wigs can't lie anymore that they didn't see this coming

greed ruled

[ArfDogMNO]

5. Will Greenspan get the credit he deserves? ntxt

In fairness to Bernanke, who is being widely criticized for his public actions in this matter, he did inherit this mess.

[burrowowl]

2. No kidding and from

RayGun to Clinton and Bu$h, the Laws and Regulations to prevent this were voted out of existence by our so-called representatives of the people!
Laws enacted under FDR!

[Warren Stupidity]

3. Plus the banks are now all mixed up in the equity and bond markets

thanks to our thoughtful repealing of one of the primary reforms of the New Deal, the (second) Glass-Steagall act which has allowed banks to get themselves completely mixed up in wall street's speculative shennanigans. The stage is set for spectacular out of control financial meltdowns.

[RoyGBiv]

6. Funny ...

... in a sad sort of way.

I clearly remember a heated argument I had with a friend about eight years ago concerning this, me trying to tell him what it would certainly mean in the not-too-distant future and him pooh-poohing every comment I made as some liberal scare-mongering. As a fan of thorough deregulation of every possible kind of market or business, the friend just couldn't see *why* banks shouldn't do whatever the hell they wanted to do.

I wonder how his portfolio is doing.

[Warren Stupidity]

7. If you read Shock Doctrine it all becomes clear.

They are deliberately encouraging disasters as a means of effecting major policy changes outside the normal democratic process and of enriching themselves through speculative acquisitions in the midst of the chaos. What they have done to the rest of the planet, with a few exceptions, is now coming home here. We saw the first doses of this with 9-11 and Katrina. We are in for a lot more.

[spin]

4. Like a football season with the referees just standing around.

never throwing flags. Eventually the games get totally out of hand and a lot of players get hurt.

Sooner or later due to public pressure they will start penalizing players. Then they throw so many flags that the games become impossible to play or to enjoy.