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You're blaming government regulations! That's absurd given many people at this point have said that the deregulation of the 90's on the financial sector is what

You're blaming government regulations! That's absurd given many people at this point have said that the deregulation of the 90's on the financial sector is what lead to much of our housing financial crisis, not to mention the widening pay gap. Your comment might actually be a good representation of how Neoliberal ideas of deregulation will continue to flourish despite them hampering to middle and lower classes. People will just say it's different sorts of regulations causing the problem, going even further down that path... EDIT: What's scary to consider is the era of strong wage increases and financial regulation from the 50's to 80's only started by a cataclysmic event, the Great Depression. Given how many large corporations and well off people benefit from the current system it's hard to imagine how we will see real increase in financial regulation similar to the Glass–Steagall Legislation until something of similar magnitude happens. Given climate change is only going to get worse, I guess a pretty big catastrophe coming our way and causing similar change soon-ish isn't that far fetched.

kiruwa 10y ago
> You're blaming government regulations! That's absurd given many people at this point have said that 1) That's not actually what he said. He said that the regulatory apparatus is currently working to assist rent-seeking and pushing wealth to the "1%". Regulation has been used to protect the wealth of the wealthy from the consequences of a free market, at everyone else's expense. 2) Argument from consensus isn't actually a valid argument. Most of the people in your consensus have been journalists, not economists. (economists are mostly trying to get people to understand that the causes are way more complex than the journalists want to believe)
- marricks 10y ago
  1) I'm discussing the narrative, the poster only cites over-regulation as a problem, which I haven't seen bail-outs called before. The language implies government rules are the problem. 2) Many notable economists actually blame deregulation, such as Alan Greenspan & the SEC [0]. I think the man who oversaw much of the deregulation while it was happening calling it a problem in hindsight is a pretty darn good indication. Of course your right though in the sense it's many things happening together, and the finger can never be pointed at one person let alone one group of policies. Still many people see the increased volatility caused by that regulation as a pretty big part of the cause. [0] http://www.nytimes.com/2008/09/27/business/27sec.html http://www.nytimes.com/2008/09/27/business/27sec.html
  - pdeuchler 10y ago
    Nobody is arguing for deregulation. We just want government regulation that doesn't overtly protect the wealth of the ruling class. Stop perpetuating false dichotomies that preclude valid criticism of current policies.
    - cft 10y ago
      It's fine to protect the wealth that is value creating (like actual industry). What is happening is increasing protection of value transference sectors (banking, pure equities plays that are often tax free, Hollywood's intellectual property), combined with increasing pressure on value creation sectors (higher corporate income tax rates) on actual real income, especially for small business that does not have scale to participate in legal tax dodging schemes.
    - marricks 10y ago
      Hmm, I see how I could be seen as doing that. Thanks for the reply!
  - generj 10y ago
    Per point 2, Greenspan is kind of the worst person to make that call. There's a very good argument that he explicitly allowed that deregulation and coupled it with a series of bailouts, resulting in the "Greenspan Put". This moral hazard was then combined with very cheap credit, all at his insistence. I'd take anything Greenspan has to say about the economy with a few metric tonnes of salt - as would many people who served on the Fed Board with him. The documentary 'Money for Nothing' is a great laymen's view on this. Similarly, the SEC isn't a super credible economic source for several reasons. One being if you are smart enough to work at Goldmans you don't work at the SEC. It's pretty self-serving for the agency in charge of regulation to argue that de-regulation was harmful. Do you know the specific economists making this argument? I'm very skeptical until I see names, and then my skepticism decreases while reading the actual paper. I would argue that deregulation was not the central issue - which was a rise in activities which circumvented regulation, like off-balance bank trading. Greenspan shielded these new fields from regulation, and the resulting over-leverage killed banks. In addition, overly cheap credit made these activities and mortgage in general overly attractive. There is a lot of evidence for this view, mostly in the multitude of institutions and industries which all had problems simultaneously. You can view this as a coincidence or you can view it as industries responding to incentives set by Greenspan. TLDR Greenspan caused the housing bubble.
cft 10y ago
What is bad about climate change? There might be more land with warm and mild climates. What is inherently bad about this? There were much bigger climate changes in the past, such as snowball earth era, when the entire earth was covered with ice and snow.
- marricks 10y ago
  Massive increases in droughts which are already happening? Not to mention sure with the changes farming areas could get worse elsewhere and better other places like Greenland but we already have farms in those locations which were good 50 or 100 years ago, it takes time to adapt and there's no law saying things even out. Not to mention when will the change stop? There isn't any indication it will stabilize in the near future meaning semi-unpredictable changes will continue to occur. Also, living through the snowball earth era would have probably been awful for the human species. Sure life survived many apocalyptic events, no reason to think our species would survive when 99% of others couldn't.
  - cft 10y ago
    Increase in temperature could actually increase agricultural output long term. Melting ice in Greenland and in Antarctica could provide the fresh water. Also, there's no fundamental reason why human population should increase indefinitely. Perhaps it will stabilize to an environmentally sustainable level. By the way Pangaea was mostly a desert due to it's smaller ratio of shoreline length to landmass. My main point is that I don't know which way is "better": global warming could be bad, or it could actually be good, or overall irrelevant (bad in some places, good in others). I do not know if anybody actually knows this.
stcredzero 10y ago
What's scary to consider is the era of strong wage increases and financial regulation from the 50's to 80's only started by a cataclysmic event, the Great Depression The wealth of that period had a lot to do with the British mortgaging their global empire to the US in order to pay off their war debt from WWI and for the US bailing them out again in WWII. In exchange, the US received approximate hegemony over "the free world" and the disguised blessing of a scary enemy to unite their side. Given climate change is only going to get worse, I guess a pretty big catastrophe coming our way and causing similar change soon-ish isn't that far fetched. Most human conflict is based on resource scarcity, fear of future resource scarcity, and/or fear of what others will do when faced with resource scarcity. This certainly applied to WWII. Even ideological/sectarian conflicts have fear of resource scarcity underpinning them.
ewzimm 10y ago
I have encountered a few people who do argue that government regulation caused the economic crisis. It seems to be the dominant understanding in the conservative media in the United States, possibly elsewhere. The reasoning goes something like this: people in government wanted to redistribute wealth by building up impoverished minority communities, so they incentivized otherwise responsible banks to lend money to people who would not have qualified for loans and punished banks that did not meet certain minority quotas. Banks responded to this pressure in the only way they could by giving out loans to minorities who then defaulted. Banks couldn't change the government initiatives, so they bundled bad loans with good to try to control the damage and save the economy, but too many minorities were irresponsible. The government then made the problem worse by adding even more regulation on banks, slowing the economic recovery and extending the recession. I don't personally subscribe to this, but it does seem to have a lot of weight with a certain crowd. It's also used as an example of how minorities and government are the source of other problems in the country, so the only way we can solve the problem is through deregulation, giving more freedom to the financial industry, and ending any sort of affirmative action.
- bubbleRefuge 10y ago
  You may answer them by stating the fact that bank management committed fraud by making loans based on false appraisals and false documentation provided by borrowers and then selling these "assets" (with the help of corrupt ratings agencies) to uninformed institutional level investors . As intermediaries banks profit from the transaction fees. This is fraud plain and simple. The public at large doesn't understand the banking system and how it is funded. Banks fund loans by creating deposits out of thin air. They don't loan money from their depositors. Because of this, they must be and are carefully regulated.
  - generj 10y ago
    Absolutely. The banks further profited by investing their own money - something we then prohibited them from doing, as it made them far too risky. Essentially the banks had abnormally high returns, which is almost always a sign of high risk. The entire purpose of regulation is to force the banks to be boring, low-risk low-return options so they have a very low chance of failing. People seeking high-returns can then go to the stock market or hedge funds, which are much less likely to be 'too big to fail'. The public is also unaware that nearly every substantial banking regulation was created as the result of a bubble, recession, or depression. We need strong bank regulations in order to prevent financial crises which can cause global depressions. Throwing away regulations when everything is going well is much like throwing out all that error-handling code your application has built up over a decade. Sure, you get better performance initially...

kiruwa 10y ago

> You're blaming government regulations! That's absurd given many people at this point have said that 1) That's not actually what he said. He said that the regulatory apparatus is currently working to assist rent-seeking and pushing wealth to the "1%". Regulation has been used to protect the wealth of the wealthy from the consequences of a free market, at everyone else's expense. 2) Argument from consensus isn't actually a valid argument. Most of the people in your consensus have been journalists, not economists. (economists are mostly trying to get people to understand that the causes are way more complex than the journalists want to believe)

marricks 10y ago
1) I'm discussing the narrative, the poster only cites over-regulation as a problem, which I haven't seen bail-outs called before. The language implies government rules are the problem. 2) Many notable economists actually blame deregulation, such as Alan Greenspan & the SEC [0]. I think the man who oversaw much of the deregulation while it was happening calling it a problem in hindsight is a pretty darn good indication. Of course your right though in the sense it's many things happening together, and the finger can never be pointed at one person let alone one group of policies. Still many people see the increased volatility caused by that regulation as a pretty big part of the cause. [0] http://www.nytimes.com/2008/09/27/business/27sec.html http://www.nytimes.com/2008/09/27/business/27sec.html
- pdeuchler 10y ago
  Nobody is arguing for deregulation. We just want government regulation that doesn't overtly protect the wealth of the ruling class. Stop perpetuating false dichotomies that preclude valid criticism of current policies.
  - cft 10y ago
    It's fine to protect the wealth that is value creating (like actual industry). What is happening is increasing protection of value transference sectors (banking, pure equities plays that are often tax free, Hollywood's intellectual property), combined with increasing pressure on value creation sectors (higher corporate income tax rates) on actual real income, especially for small business that does not have scale to participate in legal tax dodging schemes.
  - marricks 10y ago
    Hmm, I see how I could be seen as doing that. Thanks for the reply!
- generj 10y ago
  Per point 2, Greenspan is kind of the worst person to make that call. There's a very good argument that he explicitly allowed that deregulation and coupled it with a series of bailouts, resulting in the "Greenspan Put". This moral hazard was then combined with very cheap credit, all at his insistence. I'd take anything Greenspan has to say about the economy with a few metric tonnes of salt - as would many people who served on the Fed Board with him. The documentary 'Money for Nothing' is a great laymen's view on this. Similarly, the SEC isn't a super credible economic source for several reasons. One being if you are smart enough to work at Goldmans you don't work at the SEC. It's pretty self-serving for the agency in charge of regulation to argue that de-regulation was harmful. Do you know the specific economists making this argument? I'm very skeptical until I see names, and then my skepticism decreases while reading the actual paper. I would argue that deregulation was not the central issue - which was a rise in activities which circumvented regulation, like off-balance bank trading. Greenspan shielded these new fields from regulation, and the resulting over-leverage killed banks. In addition, overly cheap credit made these activities and mortgage in general overly attractive. There is a lot of evidence for this view, mostly in the multitude of institutions and industries which all had problems simultaneously. You can view this as a coincidence or you can view it as industries responding to incentives set by Greenspan. TLDR Greenspan caused the housing bubble.

cft 10y ago

What is bad about climate change? There might be more land with warm and mild climates. What is inherently bad about this? There were much bigger climate changes in the past, such as snowball earth era, when the entire earth was covered with ice and snow.

marricks 10y ago
Massive increases in droughts which are already happening? Not to mention sure with the changes farming areas could get worse elsewhere and better other places like Greenland but we already have farms in those locations which were good 50 or 100 years ago, it takes time to adapt and there's no law saying things even out. Not to mention when will the change stop? There isn't any indication it will stabilize in the near future meaning semi-unpredictable changes will continue to occur. Also, living through the snowball earth era would have probably been awful for the human species. Sure life survived many apocalyptic events, no reason to think our species would survive when 99% of others couldn't.
- cft 10y ago
  Increase in temperature could actually increase agricultural output long term. Melting ice in Greenland and in Antarctica could provide the fresh water. Also, there's no fundamental reason why human population should increase indefinitely. Perhaps it will stabilize to an environmentally sustainable level. By the way Pangaea was mostly a desert due to it's smaller ratio of shoreline length to landmass. My main point is that I don't know which way is "better": global warming could be bad, or it could actually be good, or overall irrelevant (bad in some places, good in others). I do not know if anybody actually knows this.

stcredzero 10y ago

What's scary to consider is the era of strong wage increases and financial regulation from the 50's to 80's only started by a cataclysmic event, the Great Depression The wealth of that period had a lot to do with the British mortgaging their global empire to the US in order to pay off their war debt from WWI and for the US bailing them out again in WWII. In exchange, the US received approximate hegemony over "the free world" and the disguised blessing of a scary enemy to unite their side. Given climate change is only going to get worse, I guess a pretty big catastrophe coming our way and causing similar change soon-ish isn't that far fetched. Most human conflict is based on resource scarcity, fear of future resource scarcity, and/or fear of what others will do when faced with resource scarcity. This certainly applied to WWII. Even ideological/sectarian conflicts have fear of resource scarcity underpinning them.

ewzimm 10y ago

I have encountered a few people who do argue that government regulation caused the economic crisis. It seems to be the dominant understanding in the conservative media in the United States, possibly elsewhere. The reasoning goes something like this: people in government wanted to redistribute wealth by building up impoverished minority communities, so they incentivized otherwise responsible banks to lend money to people who would not have qualified for loans and punished banks that did not meet certain minority quotas. Banks responded to this pressure in the only way they could by giving out loans to minorities who then defaulted. Banks couldn't change the government initiatives, so they bundled bad loans with good to try to control the damage and save the economy, but too many minorities were irresponsible. The government then made the problem worse by adding even more regulation on banks, slowing the economic recovery and extending the recession. I don't personally subscribe to this, but it does seem to have a lot of weight with a certain crowd. It's also used as an example of how minorities and government are the source of other problems in the country, so the only way we can solve the problem is through deregulation, giving more freedom to the financial industry, and ending any sort of affirmative action.

bubbleRefuge 10y ago
You may answer them by stating the fact that bank management committed fraud by making loans based on false appraisals and false documentation provided by borrowers and then selling these "assets" (with the help of corrupt ratings agencies) to uninformed institutional level investors . As intermediaries banks profit from the transaction fees. This is fraud plain and simple. The public at large doesn't understand the banking system and how it is funded. Banks fund loans by creating deposits out of thin air. They don't loan money from their depositors. Because of this, they must be and are carefully regulated.
- generj 10y ago
  Absolutely. The banks further profited by investing their own money - something we then prohibited them from doing, as it made them far too risky. Essentially the banks had abnormally high returns, which is almost always a sign of high risk. The entire purpose of regulation is to force the banks to be boring, low-risk low-return options so they have a very low chance of failing. People seeking high-returns can then go to the stock market or hedge funds, which are much less likely to be 'too big to fail'. The public is also unaware that nearly every substantial banking regulation was created as the result of a bubble, recession, or depression. We need strong bank regulations in order to prevent financial crises which can cause global depressions. Throwing away regulations when everything is going well is much like throwing out all that error-handling code your application has built up over a decade. Sure, you get better performance initially...