AUSTAN GOOLSBEE: I think the world vests too much power, certainly in the president, probably in Washington in general for its influence on the economy, because most all of the economy has nothing to do with the government.
Put the blame on the recession where it belongs.
In today's news:
read more:The Financial Crisis Cost More Than $14 Trillion: Dallas Fed Study
The financial crisis likely cost at least a year's worth of U.S. economic output, a new Fed study finds.
Worse, it's hurting the economy even now and will hurt it for years to come.
That is the cheerful conclusion of a new study by economists at the Dallas Federal Reserve, entitled "How Bad Was It? The Costs and Consequences of the 2007–09 Financial Crisis."
So how bad was it? Really, really bad:
The economists say a "conservative" estimate of the damage is $14 trillion, or roughly one year's U.S. gross domestic product. This is based on how much output was lost during the crisis and Great Recession, along with all the damage done to potential future economic growth.
This is a factoid worth keeping in mind the next time bank lobbyists and flaks warn, as they habitually do,
that new rules and regulations could slow the U.S. economy. Will rules to safeguard the economy vaporize $14 trillion in GDP? No? Then they're probably worth doing.
"Given our range of estimates, the tepid economic recovery, and the litany of other adverse effects stemming from the Second Great Contraction, we suggest that the total domestic cost is likely greater than the equivalent of an entire year's output," the Dallas Fed economists write. "Thus, it is crucial to identify the primary causes and implement effective policy to avoid future episodes whose magnitude could exceed even the staggering costs and consequences of the most recent financial crisis."
The Dallas Fed's numbers are consistent with a handful of other recent studies that have found crisis costs of anywhere from $13 trillion to $17 trillion to $22 trillion.
The Financial Crisis Cost More Than $14 Trillion: Dallas Fed Study
The Democrats voted to go to war and in the late 90s Clinton and his administration were making multiple public statements about Saddam's Weapons of Mass Destruction.
" One way or the other, we are determined to deny Iras the capacity to develop weappns of Mass Destruction "
" If Saddam rejects peace and we have to use force, our purpose is clear. We want to seriously diminish the threat posed by Iraq's weapons of Mass Destruction program ".
So spare me ok ? Every critique coming fron the left of George Bush is absolute nonsense.
A manufactured set of narratives placed before ignorant people that led to the election of Obama and our perpetual economic stagnation.
Yet again you have shown intellectual dishonesty to not put ANY blame to Bush. I have plenty of criticism over Obama's actions which is what led to me not voting for him in 2012. Do you have any honesty whatsoever?
The financial meltdown cost us much more than any other recession since the Great depression.
I think most of the blame for this past recession falls on the pure greed of the financial institutions.
Although the financial institutions would like us to believe and have led us to believe that mandated mortgage lending is the reason they are in trouble ,
I believe the Credit Default Swaps are the real reason that our financial institutions were in dire straights.
This last recession was unlike any other I ever experienced.
In the past we had manufacturing crisis, fuel crisis, inflation crisis, dot. com crisis etc.
In the last 40 years every other recession our country was in those who had very good or excellent credit were able to get loans. Those loans may have come with double digit interest but they were still available.
This last recession was different because the lending institutions did not have the money to loan.
I think the problem started way before the mandated mortgage lending.
I think it stated back in 1997 when the JP Moragn came up with a wonderfully evil ( my words) idea to free up their monies called Credit Default Swaps.
The Credit Default Swaps were invented in 1997 by a team working for JP Morgan. They were designed to shift the risk of default to a third-party, as this shifted risk did not count against their regulatory capital requirements. In essence the swaps were created as a regulatory loophole
Basically banks used to need to keep monies on hand to back up loans. The financial institutions decided they could free up more money for loans if they had a 3rd party be responsible if a loan was defaulted.
Kind of like an insurance policy but unlike a real insurance company which is regulated these 3rd party companies are not regulated and did NOT have the money to pay the defaults and that is why our financial institutions are in such a mess.
The banks kept lending money they did not really have until lots of defaults are coming in with no one to pay the defaults.
Then the financial institutions almost collapsed and we the taxpayers ended up bailing them out.
More info on Credit Default Swaps:
Credit Default Swaps: The Next Crisis? - TIME