Possible way in avoiding the Economic Crisis?

Onyx

Banned
Any way to avoid the recession today? The year date can be anywhere, but I'd like to see what ideas we couldve done that could avoid the crisis, but wouldve the Economic Crisis been inevitable?

Sorry for asking newfag question, just popped up my idea lately
 
I predict that, due to the tone and tenor of the conversation, this thread will need to be moved to Political Chat by the end of this day.
 
Ideally you would want POD's going back to the 90s but it could still be made to be a lessor problem with a pod even in 2001

1. Mortgage reform to slow down the build up of the bubble, either state or federal regulators don't allow the creation of exotic mortgage products and insist on tougher underwriting standards

2. the federal reserve keeps interest rates higher to dissaude people from "reaching" to buy a home

3. The federal reserve is given more authority to crack down on leverage ratio's at the banks and brokerage houses, anything exceeding 10 to 1 is squashed
 

King Thomas

Banned
No laws against *red-lining* meaning the poor don't get mortgages full stop, so the sub-prime crisis never happens.It was letting the poor get mortgages that started all of this.It's not all their fault-the greed of the bankers has a lot to do with it as well, so does their putting the subprime debt into other finacial instruments, but if the poor were not allowed mortgages then it would not have had a chance to start.
 

glowjack

Banned
No don't think of this as an institutional banker problem, think of it as an cultural problem- an American cultural problem. As Americans are one of the few people that spend above 100% of their income (Of course it does not mean all Americans, I hate political correctness). Anyone with basic reasoning ability will point out that you cannot spend more than you earn forever.

Furthermore Americans are culturally opposed to strong centralized government control which is one of the key instruments in preventing events such as this, all the free market theory crap in the States do not include the systemic cost of business. EX: When GM designs a new car it will care about how the car performs on the road but not how much the car wears on the road> but yet people will have to pay for it in some way, capitalism encourages avoiding responsibility. Same thing with inflation, pollution, regulation, safety standards and such.

Yet despite all the free market theories many Americans hold to heart the same Americans are willing to bailout companies that took stupid risks, sorta like bubble wrap kids. and don't get me started on how badly the bailout was given. It was also the same companies that are still paying their higher ups millions , giving a record amount of bonuses in 2008 to top executives, and giving them golden parachutes while they claimed to be in distress.

Really its a failure in democracy, while there were outrages in America and you may call this democracy I like to compare it with a dictator who comes up with an unpopular law, while there would be protests there would not be any substantial movement to actually do something about it.

On a side note I find it funny how Americans will spend hundreds of billions annually on its armed forces to protect its people from being hurt physically but yet its unwilling to pay for welfare to prevent its citizens from dying in the first place.
 
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In the Early 1970's and late 1960's The US Countered the far east nations with equal Tariffs on Goods comeing in to this country . The Government also stop cheep Japanese steel coming into the US . This would of stopped the Fall of the US Steel industry and with it the fall of the US industrial power .
 
Maintain a well balanced mixed economy, an economy based on services seems to me to be too fragile.
 
Furthermore Americans are culturally opposed to strong centralized government control which is one of the key instruments in preventing events such as this, all the free market theory crap in the States do not include the systemic cost of business. EX: When GM designs a new car it will care about how the car performs on the road but not how much the car wears on the road> but yet people will have to pay for it in some way, capitalism encourages avoiding responsibility. Same thing with inflation, pollution, regulation, safety standards and such.

Yet despite all the free market theories many Americans hold to heart the same Americans are willing to bailout companies that took stupid risks, sorta like bubble wrap kids. and don't get me started on how badly the bailout was given. It was also the same companies that are still paying their higher ups millions , giving a record amount of bonuses in 2008 to top executives, and giving them golden parachutes while they claimed to be in distress.

Really its a failure in democracy, while there were outrages in America and you may call this democracy I like to compare it with a dictator who comes up with an unpopular law, while there would be protests there would not be any substantial movement to actually do something about it.

And in turn it's a concept of our mindset that Government is Always Evil while failing to realize that unfettered business is definitely not inherently good. (Either that, or it's a part of our treatment of corporations as though they were people, when they are, in fact, not people and it probably would be for the best if the law not treat them as such.)

In other words, you'd probably have to change the "corporations are people" legal mentality, as well as our government vs. business mentality.
 
Agree with glowjack and bulbaquil. The best PODs to stop this kind of mentality are all decades in the past. Either we take a different approach to trust-busting in the first decades of the 20th century or we wank Keynesian feelings during the Great Depression.

After the "Brand America" mentality emerges post-WWII it becomes difficult to disengage from corporatized culture, not to mention the rise of the suburbs and promotion of homeownership that play such a huge role in the current crisis.
 
The current economic mess can be traced to about 30 plus years of a policy of deregulation. It's not just Bush and Reagan, but Carter and Ford, and Clinton. Everybody got swept up and tried to gut things for efficiency sake and to let the private sector breath easier with less regulation. The problem is, they gutted too much to the point where key safety nets were eroded or annihilated. I have a theory that this began with New Federalism, which popularized the idea of addressing an over-bloated bureaucracy; but rather than eroding the bureaucracy, it'd localize it to state levels. I think that set up a framework which Reagan could then transmogrify into cutting regulation and bureaucracy outright rather than localizing it.

But even just altering things just a few years ago could stave this off.

There is a video which, while light on issue content, kinda demonstrates how every President of the last few years hung themselves collectively.
http://www.funnyordie.com/videos/f5a57185bd/funny-or-die-s-presidential-reunion
 
As The Economist pointed out when the whole mess began, the problem was too much government regulation and too little government regulation at the same time.

Home ownership is a good thing and certain groups had been barred from home ownership for reasons other than economic ones. Governments stepped in the correct that problem and, as governments almost always do, over corrected the problem.

Lending programs, which were nobly meant to assist historically disadvantaged groups, were kept in place long after anyone in those groups who were actually credit worthy got a loan. Banks and other lenders were criminally prosecuted for, at first, actually red-lining socioeconomic groups for non-economic reasons and then, later, for only seeming to red-line socioeconomic groups for non-economic reasons. Banks were thus encouraged by both government guarantees and criminal prosecutions to lend to people who would have never received any loan on a purely economic basis. Compounding the problem, people who could receive loans got larger loans than they normally should have.

The bubble was built by governments' lending programs and the governments' insistence that people get loans they could never qualify for or loans larger than they could qualify for.

The second part of the problem was deregulation. Just as governments were deliberately increasing the numbers of bad loans and guaranteeing many of those loans, governments also loosened their oversight of the banks and institutions making and holding those loans. The banks, eager to minimize their exposure despite government promises to cover defaults, spun these potential bad loans off in iteration after iteration of financial instruments, instruments that were no longer regulated or even investigated by the governments in question thanks to deregulation. In fact, many of the instruments that eventually blew up and wrecked the world's economy could have never been created if deregulation hadn't occurred.

So, governments greatly increased the numbers of bad, fraudulent, shaky, and over-sized loans while at the same time lessening their scrutiny of the institutions making, holding, and trading those loans.

They were filling the tire and ignoring the pressure gauge at the same time. Is it any wonder things popped?
 

Valdemar II

Banned
A good start would be no Watergate, with that we have a good chance for a Republican president in 1976, and as such the second oil crisis damage the Republican rather than Democratic reputation, and a Democratic president win in 1980. As result we don't see Reagans economical politic which to large extent can be blamed for this crisis.
 
A good start would be no Watergate, with that we have a good chance for a Republican president in 1976, and as such the second oil crisis damage the Republican rather than Democratic reputation, and a Democratic president win in 1980. As result we don't see Reagans economical politic which to large extent can be blamed for this crisis.

Valdemar. It was not Reagan's policies alone that caused the recession. The framework for the recession was formed by many politicians in conjunction with big business, and a Democratic president probably would have done the same.

Besides, the 1980 election was so enormously in Reagan's favor that an oil crisis might not turn the election another way. Five million voters at least would have to be convinced to vote for the Democrats just because of the oil crisis. And with no Watergate, the Republicans have more public favor.

Furthermore, even if Reagan doesn't win in 1980, he will in 1984. Trying to put Reagan out of the equation is next to impossible since the public looked up to him so much.
 

mowque

Banned
Furthermore, even if Reagan doesn't win in 1980, he will in 1984. Trying to put Reagan out of the equation is next to impossible since the public looked up to him so much.

You could kill him, if you dislike him that much. :p
 
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