Answer To Economic Frets Is: More Government?

[Lounge Daddy]

[quote][url="http://www.nytimes.com/2008/03/23/business/23regulate.html?ei=5065&en=71e656b05114c042&ex=1206849600&partner=MYWAY&pagewanted=print"]In Washington, a Split Over Regulation of Wall Street[/url]

WASHINGTON — As Congress and the Bush administration struggle to contain the housing and credit crises — and prevent more Wall Street firms from collapsing as Bear Stearns did — a split is forming over how to strengthen oversight of financial institutions after decades of deregulation.

Democratic lawmakers in Congress and the Bush administration agree that the meltdown in credit markets exposed weaknesses in the nation’s tangled web of federal and state regulators, which failed to anticipate the effect of so many new players in the industry.

In Congress, Democratic lawmakers are drafting bills that would create a powerful new regulator — or simply confer new powers on the Federal Reserve — to oversee practices across the entire array of commercial banks, Wall Street firms, hedge funds and nonbank financial companies.[/quote]

Heaven forbid any businesses fail. Isn't that what the free market is? But there is debate over whether or not greater government oversight would secure the economy.

Issit just me, or are the early 2000s seeming an awful lot like the early 1900s?
* Cries for a shift from republicanism to democracy in the United Sates (the early 1900s brought us the 17th amendment, for example).
* Wilsonian democracy abroad
* Growing popularity of socialism
* A demand for government intervention into everything (for example: I thought I was voting for a congressman, not a baseball commissioner)

Didn't the early 1900s bring about the Great Depression? And once again, the more the government takes it upon itself to 'help' the more any economic issues will be exasperated. All too often, history repeats itself.

[Mercy me]

It is not just you. There is a similarity. And since we don't seem to study history we are bound to repeat it.

[Autumn Dusk]

Actually, its partly our fault. Our fault being the "Echo Boom"

In the 1950's there was the baby boom. By the 1980's they were grown up and schools, parks, etc had to stop being made. They were getting married, consolidating lives and were beginning to have children. This caused the depression in the 1980's. The echo boom is the children of the baby boomers. No one really agrees but in general they were born 1981-1996

Now meet the late 2000's. As we enter the 2010's the children born in the 1980's and later are in the same place their parents were. We're 12-28 and are being weaned off our baby boom parents' lives but not financially stable enough to really support the economy.

[dairygirl4u2c]

the crisis that's occuring now, is because no one regulated this area.
not that it was justified to regulate it, but government could have prevented it if that's what we desired.

also, government shouldn't be looked at so poorly.... as markets are known for not failing only because the fed does things with the interest rates and other things. oversight... this is really not disputed by anyone reputable.
it'd take a whole lot of anti "guvment" on principalness to want to get rid of that oversight.

there's two types of free market capitalism, laissez faire free markets and free market theory. there's actually a difference. the theory depends on rational people and perfect information. in reality, information costs a lot, that's why you have education costs soaring, that's why you have businesses that do not compete to drive down costs for education or pick many businesses. that's why you have insurance causing a problem, which i'd have to explain it but.
the heart of all this is imperfect information mostly, and to some degree a lack of rational people.
the popes have always condemned capitalism taken to the extreme such that people are scrapping it,,, and if that's occuring in an area like health care, surely they'd condemn capitalism in that regard even if it's just one issue, as well.
(granted they condemn pure socialism too, but to be one sided as people here tend to do, isn't healthy)

i'm just saying that the government isn't always bad.

i could go into some reasons why they could do something now, and how, if you want me to.
i'm not super liberal about though, mostly practical and realistic.
freedom to fail has always been a hallmark and justly necessary in society, and personal responsiblity.

Edited March 23, 2008 by dairygirl4u2c

[kenrockthefirst]

[quote name='Lounge Daddy' post='1481965' date='Mar 22 2008, 08:25 PM']Didn't the early 1900s bring about the Great Depression? And once again, the more the government takes it upon itself to 'help' the more any economic issues will be exasperated. All too often, history repeats itself.[/quote]
If you mean because of government regulation, then no. Check out the time opinion piece by Paul Krugman, [url="http://www.nytimes.com/2008/03/21/opinion/21krugman.html"]Partying Like It’s 1929[/url].

As an aside, if you like clean, unspoiled food and pharmaceuticals that won't kill you, thank government regulators from the early 1900's.

Finally, as an avowed anti-socialist, I'm sure that you must be dead set against the bailout of Bear Stearns.

[kujo]

As a student of political science, I face questions of this nature a lot. And, as a registered Republican, my reflexive answer to questions of increased federal government involves loud cries, head spinning, and pea-soup-spitting; however, I really feel like perhaps the federal government needs to do SOMETHING here. I respect the free-market mentality of allowing people to fail, yet I cannot agree with the notion that our President and our Congress should sit idly-by while our country slips into another economic depression. The beauty of our country is the fact that there is a safety net for its citizens. Maybe I'm wrong here...but I am just too afraid of this failing economy to let my voting registration card dictate how I feel.

[kenrockthefirst]

[quote name='kujo' post='1483751' date='Mar 25 2008, 11:53 AM']As a student of political science, I face questions of this nature a lot. And, as a registered Republican, my reflexive answer to questions of increased federal government involves loud cries, head spinning, and pea-soup-spitting; however, I really feel like perhaps the federal government needs to do SOMETHING here. I respect the free-market mentality of allowing people to fail, yet I cannot agree with the notion that our President and our Congress should sit idly-by while our country slips into another economic depression. The beauty of our country is the fact that there is a safety net for its citizens. Maybe I'm wrong here...but I am just too afraid of this failing economy to let my voting registration card dictate how I feel.[/quote]
Fair enough and, BTW, I agree. But why is government help OK for Wall Street investment banks but not for "welfare queens?"

[kujo]

[quote name='kenrockthefirst' post='1483800' date='Mar 25 2008, 03:33 PM']Fair enough and, BTW, I agree. But why is government help OK for Wall Street investment banks but not for "welfare queens?"[/quote]

I don't always disagree with using federal funds to help the poor. I think that aid should be incentivized--that you cannot receive money unless you are showing an effort at improving your situation. That way, we don't have people living on welfare forever, but only until they've established a better way of caring for themselves. There should be a time-limit as to how long they have to find a job and stuff.

As I said, I don't know if government intervention is the right thing here. I'd have to hear a proposal, from either side of the aisle, before I decided whether or I agree with it or not. I just dont think we should take it off the table simply because it would be considered a "big government" thing to do.

[T-Bone _]

[quote name='kenrockthefirst' post='1483800' date='Mar 25 2008, 12:33 PM']Fair enough and, BTW, I agree. But why is government help OK for Wall Street investment banks but not for "welfare queens?"[/quote]

Mainly because when if the banks failed, it would have devastating effects everyone.

[kenrockthefirst]

[quote name='T-Bone _' post='1484393' date='Mar 25 2008, 10:21 PM']Mainly because when if the banks failed, it would have devastating effects everyone.[/quote]
As opposed to only having devastating consequences for a single mother and her children? Does it really only come down to a difference of degree and not principle? If you're against "socialism," fine, you're entitled to your view. But if it's about the many versus the few or the one, what's good for the goose is good for the gander, IMHO.

And FWIW, I think there's something beautifully poetic and just about the fat cat Wall Street bankers, particularly Bear Stearns, getting their comeuppance. It's a pity the Fed won't let them reap the bitter fruit of their greed. And before you accuse me of "class warfare," I would direct your attention to the Epistle of St. James.

[dairygirl4u2c]

well, i think he could argue the mother put herself in that situation, or got herself in that situation. whereas, the bank problems are affecting even innocent people. and there's no way to fix this without government intervention, arguably.

i do see the point though, that the mother often isn't her own fault, and that even if it was, the social conditios that keep her down, should not exist in a just society. it's like slavery. i can describe this if you want.
so, the question with welfare queens are what heppened to htem, their individual stories. either regulate so you can hlep the right ones, or help them all, with procedural safeguards to prevent abuse with thigns like welfare to work etc etc.

but for the ones when it's not her fault, i would say ken's point stands firm without dispute.

[kenrockthefirst]

[quote name='dairygirl4u2c' post='1484750' date='Mar 26 2008, 11:58 AM']well, i think he could argue the mother put herself in that situation, or got herself in that situation. whereas, the bank problems are affecting even innocent people. and there's no way to fix this without government intervention, arguably.[/quote]
[list=1]
[*]Bear Stearns "put [itself] in that situation."
[*]A single mother's "problems [affect] even innocent people."
[/list]
Again, what's good for the goose is good for the gander.

[kenrockthefirst]

[img]http://www.uclick.com/feature/08/03/28/ta080328.gif[/img]

[Lounge Daddy]

Two new articles linked up at Drudge:

[url="http://www.bloomberg.com/apps/news?pid=20601087&sid=aRtdXeb9Bca4&refer=worldwide"][b]Call for new regulatory agencies... [/b][/url]
[url="http://www.nytimes.com/2008/03/29/business/29regulate.html?ei=5065&en=7ba12b1b93b17830&ex=1207368000&partner=MYWAY&pagewanted=print"]
[b]TREASURY DEPT. PROPOSES MORE POWER FOR FED[/b][/url]

In other words, the government is calling for more government. Unfortunately We The People are not really calling for more liberty.

[Lounge Daddy]

[quote name='kenrockthefirst' post='1483634' date='Mar 25 2008, 09:56 AM']If you mean because of government regulation, then no. Check out the time opinion piece by Paul Krugman, [url="http://www.nytimes.com/2008/03/21/opinion/21krugman.html"]Partying Like It’s 1929[/url].

As an aside, if you like clean, unspoiled food and pharmaceuticals that won't kill you, thank government regulators from the early 1900's.

Finally, as an avowed anti-socialist, I'm sure that you must be dead set against the bailout of Bear Stearns.[/quote]
As an avowed anti-socialist, I am.

And the author of that article deliberately passes over the causes of the Great Depression, and what exasperated and prolonged it. [url="http://64.233.167.104/search?q=cache:UIQvzMDhyacJ:www.cato.org/pubs/tbb/tbb-0508-25.pdf+The+Government+and+the+Great+Deprssion&hl=en&ct=clnk&cd=1&gl=us"]The Cato Institute has a piece[/url] written, in part, in response to a History Channel special that carried a message also repeated by government-approved textbooks in government (and other) schools; that "Roosevelt and his New Deal resulted in 'recovery and reform' while creating 'millions of jobs.'"

[quote]Such often-stated claims are incorrect. Misguided federal policies caused the downturn that began in 1929,
and they prevented the economy from fully recovering for a decade. Policy blunders by the Federal Reserve,
Congress, and Presidents Herbert Hoover and Roosevelt battered the economy on many fronts.

The events of the 1930s influence economic policymaking today. Many people think that we need a big
government to prevent, or to reverse, recessions. But the 1930s illustrate that activist policies increase, not decrease, economic instability. Government interventions reduce the flexibility that markets need to adjust to shocks and return to growth.[/quote]

The article is a good one; and it is less than two pages, so it's a quick read.

And I like that companies, on one hand, profit by selling meat; while on the other hand, they wish to maintain a satisfied customer base. Therefore these companies do their best to sell clean and delicious meat.

Government regulation wasn't, and isn't needed. The market demands accountability. [u]The Jungle[/u] was a part of the customer demand for accountability to the customer, rather than a demand for the government to step in.