05-11-2011, 04:52 AM
Ted King wrote:
[quote=btfc]
"Nice work, rankandfile"
I agree!
:thumbsup: Nice analysis. To the bit about the shenanigans of under-regulated finance guys, I'd also mention the role of allowing those guys way too much leverage. Leverage is just made up money as multiples of actual money held. They can take $1 million in investments/savings and give out $10 million of credit - skimming a small percent for themselves for doing the deal (but since the total is so large, even that small percent amounts to a pretty good sized sum.) A few multiples of leverage in the right circumstances has a beneficial affect on society, but as leverage grows, it becomes more risky and has a detrimental affect on society - but the finance guys can make out like bandits. Leverage almost always has a big role in the formation of a bubble - particularly in the later and most damaging stages of the bubble.
A few prosecutions might have gone a long way toward self-regulation since that seems like all we have to rely on. The one consumer protection agency with any teeth is headed by Elizabeth Warren. According to her she and the agency she heads are faced with unrelenting attack from a Republican dominated House.
The GOP couldn't win the public debate over increased regulation so they're instead using the backdoor approach of de-funding and hamstringing the Agency by any means at their disposal.
That deregulation was distorted to the point of almost destroying our economy seems to mean nothing to them or the wealthy supporters they work for and respond to. It didn't resonate with voters either else they'd not have been returned to power.
It's odd that the thing that may bring this home and cause them another Congressional loss was not the damage they did to the economy but instead the fall-out from their ill-fated attempt to dismantle Medicare.