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Originally Posted by The Demon
This is incorrect kane, if we adjust it for inflation. 2000-2010 was the worst decade for stocks since the 30s, and there was actually a negative return. Ditto for GDP, wage, and deficit.
The fiscal and monetary mismanagement began after Nixon took us off the gold standard. That's when the printing presses rolled out. That's when we started spending and stopped saving. That's when we started moving away from being a manufacturing economy, and towards a service economy. The fact that home prices are so high is the leading cause of the sub prime mortgage failure as well as inflation. You have to adjust everything for inflation dude.
It's both, but regulation of the financial markets has met with constant failure.
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Sure, there are a lot of reasons that things have gone south as of late. Regulation has played a small roll in that, as has greed, mismanagement, ignorance, overspending, and a million other factors.
Let me just ask you this: Which would be better for the country? 1. We let companies like AIG do as they please. They play risky games and create wealth out of thin air then when it catches up to them they collapse and burn, take with them 20%+ of the nations banks and cause massive unemployment, stock market collapse and all kinds of chaos. Once the dust has settled another company steps in and takes up the slack they have left behind and starts doing the exact same thing which will be great for about 10 years then it too will crash and burn.
or 2. We put in a regulation that either oversees how some of the derivatives are handled, or maybe we completely disallow them and say to the market :" If you want to make money, you need to sell a good or a service to someone. You can't just come up with complex formulas that just create wealth out of nothing?" And AIG is left making several hundred million dollars instead of a billion dollars. They still are huge, they still have an enormous amount of wealth, but they are a little more stable.
Which do you think is best for the country as a whole?
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I disagree. Because that rabid wolf will lose strength and there will be nobody to help him as he slowly lacks the ability to hunt. As greedy as people are, it's better that there's no regulation in the private sector than mass public regulation for everything. Again, whatever fails, should stay failed.
Government oversight is unnecessary. You speak about rabid wolves, but those same rabid wolves exist in government, which is even worse than independently in the private sector. AIG should have been allowed to fail. Everything that failed should have been allowed to fail, with new shit popping up. Instead, we bailed them out. Sad.
Again, same greedy people exist in government. With oversight, they have the full government backing to do what they want. That's a hell of a lot worse than what we had happen in the past 3 years.
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I agree with you that if something fails, it should stay failed. To me this isn't about the bailouts, this is about preventing situations that put us in a position where people even consider bailouts. The beauty of the free market rabid wolf is that it will never go hungry or get tired. It will eat its young as it burns the forest around it, then it will crawl into its den and sleep. When the forest has regrown and the animals have returned, it returns to hunt. For a while it is fine, but then it gets greedy again and kills too much and it is back to where it started.
I understand that there are greedy politicians and I understand that they often have their own self interests at heart. My point in all of this is that I don't see the harm in setting up a group of ground rules. Of saying, "These things are just too risky and pose a threat to nation as a whole so we aren't going to participate in them." If you want to make money as a Capitalist does do what they used to do which is offer a service or product for sale to someone. Deliver that service or product and get paid for it. But we should be allowing people to just create financial devices that create wealth out of nothing. I don't see the harm in having that type of regulation.
We have to learn from history. If history shows us that certain business practices are bad for the economy, then I see no problem in overseeing them just disallowing them. I could make a bunch of money selling meth, but the government has decided that this is bad and they don't let me do it. At least if I sell meth the person that buys it knows they are fucking up their lives. With a lot of the shady shit that goes down on wall street there are plenty of people who one morning wake up and find their 401K is worth half what it was the week before and it is all due to a few people who decided to take extreme risks so they could get a bigger bonus.