For those of you who were curious about exactly *why* the economy is in its current shape, this site has a video that explains it pretty well. I found it interesting, educational, and easy to understand.
http://crisisofcredit.com/
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For those of you who were curious about exactly *why* the economy is in its current shape, this site has a video that explains it pretty well. I found it interesting, educational, and easy to understand.
http://crisisofcredit.com/
I knew the basics, but wow, that was kind of helpful in that it concisely summed it all up. Now if he could only go and make a video on the bailout/etc.
Yeah, easy money really is what causes pretty much every recession. But just you stand up and say that during a boom. See what happens.
Alan Greenspan, the genius, right?
Quote:
Originally Posted by phattonez
....wtf?
Alan Greenspan was the head of the Federal Reserve who introduced the terribly low interest rates that we had between 2001 and the current recession. The video was about how this crisis is due to us having too much credit. It just blew up in our face. Did you even watch the video?
This is an incredibly uneducated statement. Spouting off vast generalizations and truisms doesn't make you sound smart, man. Stick to what you know: easy money was a big contributor in this current situation.Quote:
Originally Posted by phattonez
Any honest economist will admit there are multiple theories of recessions and their causes, and will tell you that some are true for certain cases and some apply in others (when the necessary assumptions of the models are present).
I think "greed" pretty much sums up a large contributing factor of the problem.
I personally love how Alan Greenspan admitted to finding a "flaw" in his model, that flaw being that people are greedy cheaters who will abuse the system given the chance with no regard for the consequences. Seriously? How the hell did he miss that little whoopsie?
The gap between economic models and policy making is still much larger than most economists like to admit; however, you would hope that the chair of the fed would be more aware of that...
I like how I don't have to reply to Fat Tony - you just took care of it for me.Quote:
Originally Posted by Icey
Thanks broseph!
Doesn't a boom generally precede a bust? What are the factors that lead to a boom?Quote:
Originally Posted by Icey
And also, according to that, recessions would be almost impossible to predict. But that doesn't make sense since the Great Depression was predictable and our current recession was predictable. The Austrian Business Cycle Theory explains both.
Cannot a recession also be caused by say, an energy crisis that results from instability in the middle east?
You're always going to have economic issues when the people 'creating' the money are doing so for profit. Any debt-based economy is doomed to fail. Money is treated as a commodity. It shouldn't be. In reality it's just a means to an end, not a commodity in of itself.
I really like how Abraham Lincoln used the greenback as currency. No business or bank was allowed to print it, only the government. And it wasn't ever given out on loan with interest (which for me is the basic flaw of our monetary system; the fact that the people making the money are allowed to charge interest. Where the fuck does that interest come from if they're the only ones printing currency?). It was simply used to pay for the government budget, which leaked the cash out into the public naturally, as the government at that time had to pay private companies for any work done. Of course there was a bit of inflation, but Lincoln had the ingenious idea of destroying money as it filtered back up if it wasn't needed, thus naturally creating deflation.
I'm not saying it would work now, with the world economy we now harbor. But it's a hell of a lot better of a system than what we do have.
so basically a bunch of idiot home owners were irresponsible but were still able to get loans and mortgages that they were not capable of even remotely paying back, which made respectable people not have any chance of getting them.
and stuck everyone else in the line with something that they really cant even do much with.
I mainly blame the mortgage brokers and the US federal reserve and Wall street!
You mean like the oil crisis of the 1970s? It was a part of the stagflation, but I'd be hard pressed to prove that it was the sole cause. I can show how price controls and inflation could do it, especially since price controls caused the oil shortage. Prices should have shot up, but it was restricted, hence the lines.Quote:
Originally Posted by rock_nog
EDIT: And I just want to clear something up. Theoretically, something like a food shortage could cause a recession, but in today's world, that's not really a problem, at least in our country. The only thing today that I think could cause a recession like that would be some kind of oil embargo. Even then I think it would go by quickly. This recession we have right now is a part of the business cycle and was caused by the terribly low interest rates of years prior.
I can't help but mention the tin-foiling Mises argument here: Greenspan, Bush, and the like aren't capitalists, but just like to say they are. And after all, the socialists are having a WONDERFUL time right now pointing and saying "Oh look, the free market failed!", aren't they? Just saying.Quote:
Originally Posted by rock_nog
of course if you are lazy and just taking free money, you are going to blame the free market when you go broke. most of these unemployed people didn't really do any hard work except when the boss was looking. you can't just take a loan, buy a nice home and a nice truck and think everything's going to be peachy. gotta earn it by the sweat of your brow