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And meanwhile, what happens to the people who are bankrupted, ruined, cannot eat or get health care, while the system self-corrects? Reasonably happy, non-maln

And meanwhile, what happens to the people who are bankrupted, ruined, cannot eat or get health care, while the system self-corrects? Reasonably happy, non-malnourished people make better employees, you'll have to admit.

corentin 18y ago
The system doesn't self-correct everywhere at the same time (unless there is a central bank point of failure, if you see where I'm going...), so if your company is bankrupt you can find a job elsewhere. Mind you, people who were careful with their money and didn't believe in the pipe dream of ever increasing home equity need not worry about what's going on (well, they need to worry about what the government is doing, but that's another matter).
- redrobot5050 18y ago
  Um, we didn't have a central bank point of failure. We had 5 large investment banks, most of which had the intelligence to survive the first great depression. The major problem is that the American economy had become entirely dependent on consumer spending, which, because of a lack of real wage growth among the bottom 80% led to a massive expansion and dependence on credit. When the housing bubble burst, credit went cold turkey, and many defaulted on their debt because of their inflated lifestyle. As a result, everyone suffered. Consumers stopped spending, which lead to businesses credit lines being downgraded, leading to a halt in manufacturing and importing. The global ripples of having a force (like credit) simply disappear are obvious, just as they were right before the first great depression.
sounddust 18y ago
Exactly; The system, left completely unregulated, will find the most efficient/optimal path, but at what cost? The optimal path may involve ruining the lives of 100 million people. The optimal path may bankrupt many countries, causing its citizens to starve to death. There is nothing wrong with reasonable regulation to ensure a certain amount of stability in life.

corentin 18y ago

The system doesn't self-correct everywhere at the same time (unless there is a central bank point of failure, if you see where I'm going...), so if your company is bankrupt you can find a job elsewhere. Mind you, people who were careful with their money and didn't believe in the pipe dream of ever increasing home equity need not worry about what's going on (well, they need to worry about what the government is doing, but that's another matter).

redrobot5050 18y ago
Um, we didn't have a central bank point of failure. We had 5 large investment banks, most of which had the intelligence to survive the first great depression. The major problem is that the American economy had become entirely dependent on consumer spending, which, because of a lack of real wage growth among the bottom 80% led to a massive expansion and dependence on credit. When the housing bubble burst, credit went cold turkey, and many defaulted on their debt because of their inflated lifestyle. As a result, everyone suffered. Consumers stopped spending, which lead to businesses credit lines being downgraded, leading to a halt in manufacturing and importing. The global ripples of having a force (like credit) simply disappear are obvious, just as they were right before the first great depression.

sounddust 18y ago

Exactly; The system, left completely unregulated, will find the most efficient/optimal path, but at what cost? The optimal path may involve ruining the lives of 100 million people. The optimal path may bankrupt many countries, causing its citizens to starve to death. There is nothing wrong with reasonable regulation to ensure a certain amount of stability in life.