Why do people blame capitalism for this mess, this is a result of government interference?
Why isn't Congress being called out on this, the American people should be FURIOUS that the government intervened in the markets so, why aren't they?
Capitalism can only function well when there is a level of fear in investments.
Well, the government took the fear away in many ways and laid the groundwork for the housing market.
It bothers me that people blame capitalism for this mess when it is not at fault.
- 1 decade agoFavorite Answer
Capital had nothing to do with this. Neither did Bush, nor did Obama.
If anyone wants to properly place blame, start here:
CRA - Carter
CRA - Clinton
Gramm-Leach-Bliley Bill - Drafted by Republicans, signed by Clinton
Barney Frank and half the Black Caucus for blocking efforts to regulate Fannie and Freddie
Obama will likely not help the situation. The largest single block of his campaign contributions came from the financial sector, far, far more money than he got from average Americans.
Sorry dude, but that is the most ridiculous bit of twisted history I've seen in days. It's okay if you hate Bush and the Iraq war, but there are plenty of facts to support your case which you could use to expand your credibility instead of assassinating it with this drivel.
The ever-changing value of the dollar does not directly correlate to the cost of a barrel of oil between April and October of this year. Compare the graphs!
The price of the bail-out (850 billion including the 150 billion in pork) surpassed in 3 days what we've spent on Iraq in 5 years!
Before Bush, Clinton spent more money than all previous adminstrations combined. The argument is disingenious due to inflation. If we do adjust for inflation, FDR was a huge spender!
I could go on, but this is getting rather long for an edit...
GREED is certainly at play here, but what group of people are beholden to us? Corporations are, and should be, working for their shareholders, including banking corporations. Your neighbor who's gotten himself into a house he can't afford isn't responsible to you and me either. The only group that is responsible to us is our government. We elected them to do our bidding, and the financial mess tracks back to them.
A careful read of the changes Clinton made to the CRA in 1993 will show that he actually started this mess. But the flood gates really opened when he signed the Gramm-Leach-Bliley Bill in 1999, freeing Fannie and Freddie to buy no-money-down, non-qual loans from banks. It also eliminated the regulation on investment banks that FDR put in place back in 1933 called the Glass-Stegal Act. The 1999 bill was introduced by Republicans, voted for by Democrats including Dodd, Shumer, Barney Frank and Biden, and signed by Clinton. Both parties were responsible for our financial mess!
Plain and simply, the American people were let down by our government. If we want a better government, we can't vote for these people next time they come up! Barney Frank has held his seat in Congress since 1981! That's too darn long for a guy that not only voted for the flawed 1999 bill, but defended it vigorously all through the 2000s against everyone that wanted to put regulation back in place.
And while we're on the subject, who tried to put regulation back in place? LOL Believe it or not, it was Republicans. Ed Royce of California, John McCain - twice 2005 and 2006, and even Bush! The http://www.whitehouse.gov/news/releases/2008/10/20... web site has 17 documented cases where Bush manuvered unsuccessfully to place regulation back on Fannie and Freddie. This may turn out to be Bush's biggest failure!
Here's what McCain said when he cosponsored the Federal Housing Enterprise Regulatory Reform Act of 2005:
"If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole."
We as individual Americans cannot control corporate or individual greed, but we can sure control greedy politicians, and I suggest we start doing it!
Look and see which politicians are getting the most money from the financial sector for a start. http://www.opensecrets.org/news/2008/09/update-fan... I'd say the top 30 on this list should all go. Pelosi is in there too BTW.
- 1 decade ago
I don't blame capitalism for this mess we are in - I blame GREED.
Banks were giving out loans like they were handing out glasses of water! When the time to pays comes around, they are honestly surprised that the individual making $40,000 per year can't afford to pay the mortgage on the $300,000 home?
The individuals getting the loans were stupid! If I were making $40K, I would hardly even be LOOKING at a home that is worth $300K!
The economy went too far based on credit. Everyone decided they could live beyond their means because they didn't have to pay right now - they had credit! It is like the college student that has a credit card, and finds out that they can leave the store with the huge TV without shelling out a dime. But when the bill comes later, you eventually do have to pay for it - with interest.
And don't get me started on the automakers! The idiots went and modified most of their plants to make SUV's because that was where the money was. Nevermind they were counting on oil remaining "low" so that the gas guzzling vehicles would remain popular. It was stupid, impulsive, and very "in the now, to hell with the future" thinking. Hardly a way to run a multi-billion dollar corporation!
As much as it galls me do it, my tax dollars are going where needed - sort of. They should be bailing out the consumers - the homeowners in particular. If they had the money to pay, they would not have such a credit crisis in the banking industry, and it would all be fine in the rest of the economy. But instead they throw money at the reason - not at the problem. It is like throwing water on the match to stop the forest fire after it has raged for a week.
And when the government gives the money to the homeowners in crisis, it should come with the stipulation that they take financial counceling courses, and have a certificate proving completion to keep a low interest loan. Education will be the key to this crisis in the end.
- Anonymous1 decade ago
It doesn't matter if you feel that capitalism is over regulated or under regulated at this particular point.
Just look at what is happening now. You say the government has interfered too much?
How did government interference contribute to Maddoff running a 5 BILLION dollar Ponzie scheme?
How did too much regulation lead to the banks trading collateralized financial instruments that were used to insure their assets.
When are you Republican nimrods going to realize that an unregulated wheeler-dealer is like a kid in a candy store. Wall Street can make money betting on their stocks or betting against their stocks. And, that is one of the very basic little tricks they've come up with.
When you get into derivatives they can make money out of thin air. The problem is that it is the expense of all of the legitimate investors.
The problem with Republicans is that you think that if you wear a suit and tie you can't really commit a crime. You don't have to live in a ghetto to be a crook.
Deregulating business, particularly banking and investments is the same as abolishing the laws against robbery.Do you really think that if we make it legal to speed that the number of traffic accidents would eventually kill all of the speeders.
The reason that you lost the election and will lose all elections in the foreseeable future is that YOU ARE UNREALISTIC.
Worse than that...you refuse to learn from your mistakes. The financial markets are tanking, fat bankers are bilking you out of your life savings, and you are STILL calling for less government intervention. Geeze.
- macmanf4jLv 41 decade ago
as we evolve so as our societies and our tools and as well as the mode of production.as a mode of production capitalism has it's own flaws and inherent problems (as a human tool) brings about corruption and injustice.also since resources and/or capital, power and status have been unjustly and illegitimately divided, it will necessarily encourage grouping ( by religion, nationality, race and etc) and conflicts within a population and fighting over the left over resources and/or capital .capitalism functions well for big corporations and/or the ones who have the most capital. when that is the case; there is not as much fear,and fun to watch others sweat meanwhile! those inside information sure helps and adds more fun as you watch your checkbooks go up! peace
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- WitchyLv 71 decade ago
I agree with you but the media doesn't. The media is the ones who are mistakenly blaming capitalism and ignoring the root causes of the situation. Many people don't think for themselves and will blindly believe whatever they are told.
Now, why is it so important that the media ignore the root causes of the problem? What are they afraid of losing? I don't have the answer to that.
- SageandscholarLv 71 decade ago
The ludicrous suggestion that laissez faire economics will reproduce anything other than Dickensian style poverty and exploitation is patently ridiculous.
Our economy has controls and those that decry them are dealing with fiction such as yours to do so.
Even the king of free market economics Alan Greenspan has written this off as a failure to regulate.
- lil' autarchLv 61 decade ago
The markets have been manipulated by the Central Bank (oops, I mean "Federal Reserve") since 1913. The federal government has been playing their fool for decades, ever since that first capitulation to the scoundrels from Jekyll Island. Given the loyalty of bankers to money and profit, and their knowledge of the mechanics of fiat currency and debt, it is likely that the long term, widespread effects of securitizing shaky mortgages were neither unforeseen, nor accidental.
- Anonymous1 decade ago
Capitalism is good, but capitalism & greed= disaster and that is just what America has come to in 2008!
- DanielLv 43 years ago
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- Anonymous1 decade ago
The people who don't want capitalism are blaming capitalism. There's a battle going on. Most people just don't realize it yet.