Comments on: Why Neo-Liberalism Failed

By: John Mansfield

John Mansfield — Mon, 22 Dec 2008 17:50:34 +0000

ox: i almost agree, except that economics is pretty closely tied to global warming.

By: ox

ox — Thu, 18 Dec 2008 21:40:41 +0000

my 2cents

the economic crisis is just distracting us from the real issues which are mostly global warming, mass extinction and a smattering of resource depletion. the economic crisis is like the bird flu

By: John Mansfield

John Mansfield — Sat, 25 Oct 2008 16:11:37 +0000

Suedester, I do agree that foolish government interventions have also had a major role in the crisis.

By: John Mansfield

John Mansfield — Sun, 19 Oct 2008 23:34:11 +0000

Wow. Between the main post, and some very insightful/detailed comments, that “Goodmath” posting gives a fantastic overview of the situation.

Free markets are great things. But the big catch is that like anything else run by human beings, they’re easy to abuse if you’re not honest. The purpose of regulation is to try to limit the kinds of abuse people can get away with. If someone sells you an investment and tells you that your principal is absolutely safe, then damn it, it should be safe. If it’s not, they should be required to tell you what the risks are.

Better than my sub-prime effort.

By: Suedester

Suedester — Sat, 18 Oct 2008 08:04:41 +0000

Of course, it could all just be caused by the pirates:

http://www.sciencedaily.com/releases/2008/10/081015110751.htm

By: Suedester

Suedester — Sat, 18 Oct 2008 07:29:19 +0000

Here’s an amusing (in hindsight) NY Times article from 1999, talking about Fannie Mae’s lowering of lending standards:
http://query.nytimes.com/gst/fullpage.html?res=9c0de7db153ef933a0575ac0a96f958260&sec=&spon=&&scp=1&sq=Fannie%20Mae%20Eases%20Credit&st=cse
Of note:
”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

Prior to the 1993 (revied CRA) act only about 5-6% of loans were subprime. Afterwards it slowly creeped up to 20-25%.

For a scathing critique of the causes and reactions to current crisis, see Mike Shedlock’s excellent insights:
http://globaleconomicanalysis.blogspot.com/2008/02/bank-of-america-asks-congress-for-739.html
He says it’s not the free market’s fault, but grossly negligent government interference that caused the current problems.

By: Kane

Kane — Fri, 17 Oct 2008 00:32:22 +0000

check out this link:
http://scienceblogs.com/goodmath/2008/09/economic_disasters_and_stupid.php

this math-nerd does a good job of explaining how it all fell apart..

By: John Mansfield

John Mansfield — Thu, 16 Oct 2008 16:58:04 +0000

So you’re saying that banks have failed *because* of government interference? Or, that they haven’t actually failed, they were doing fine, and the government stuck its head it in where it wasn’t needed?

Can I get some references here? Seriously, I want to know more about this.

By: Suedester

Suedester — Thu, 16 Oct 2008 08:21:26 +0000

In what way has it failed? Free markets are never smooth by their nature. Throw in huge political interference (forcing banks to make bum loans) and then nationalising those banks in grand gestures - even when many of them are healthy and don’t need assistance - makes the ride even rougher.