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Archive for the ‘Economics’ Category

“As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing.  When their credit ran out, the game stopped.”

— Marriner S. Eccles, Chairman of the Federal Reserve under Franklin D. Roosevelt, speaking in 1951

When we do not learn from history, we are destined to repeat it.

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Three have died already.  This is yet another failure of unregulated markets.  Considering all the tainted pet food and lead-filled toys that caused a scare last year, maybe the Chinese are finally going to realize that they’ll have to regulate their products better.  You can’t just let the private sector “police itself.”

And the Dow has dropped another 250 points as of this writing.  The federal government has agreed to loan AIG $85 billion.  If AIG can’t recover and pay that back (plus interest), the fed gets 80% of the company.

When will the idealogues learn?  We’ve seen this before, in 1928 and 1987.  Those who won’t learn from history are destined to repeat it.

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“What we’ve seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed. And I am running for president of the United States because the dreams of the American people must not be endangered any more.

“It’s time for a government that is fighting for you — not ignoring you, or fighting against you.

“If you want to understand the difference between how Senator McCain and I would govern as president, you can start by taking a look at how we’ve responded to this crisis. Because Senator McCain’s approach was the same as the Bush Administration’s: support ideological policies that made the crisis more likely; do nothing as the crisis hits; and then scramble as the whole thing unravels. Now, my approach has been to try to prevent this turmoil from occurring in the first place.

“In February of 2006, I introduced legislation to stop mortgage transactions that promoted fraud, risk or abuse. A year later, before the crisis hit, I warned Secretary Paulson at the Treasury and Chairman Bernanke at the Fed about the risks of mounting foreclosures and urged them to bring together all the stakeholders to find solutions to the subprime mortgage meltdown. Senator McCain did nothing.

“This March, in the wake of the Bear Stearns bailout, I called for a new, 21st-century regulatory framework to restore accountability, transparency, and trust in our financial markets. Just a few weeks earlier, Senator McCain made it clear where he stands, [saying] ‘I’m always for less regulation,’ and referred to himself as ‘fundamentally a deregulator.’

“Now this is what happens when you confuse the free market with a free license to let special interests take whatever they can get, however they can get it.”

Actually, there is no confusion.  Any “free” market is a license for special interests and power brokers to take whatever they can get.  Freedom from regulation always makes that possible.

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