It was arrogance, greed, and stupidity by Goldman Sachs, Merrill Lynch, Morgan Stanley, Bear Stearns, Lehman Brothers , and others in this same category....that are mostly responsible for the current financial calamity...... It is the very name of these firms that have supported the hedge funds and themselves that created the oil price bubble and the cost of food problem to the majority of the world's population....totally out of sink with the ebb and flow of natural demand. Likewise it was this category of firms that created...starting with Michael Milken at Drexel Burnam....who served time in jail....the CCC rated toxic debt that has infested virtually every major firm....which was sold as AAA debt to all the unsuspecting.... If there was anyone on earth qualified to judge risk...it was this group....and not only is the toxic debt damaging on a one to one basis.....but these firms in the effort to outdo...and out-greed each other....even levered the CCC paper more than 30:1....whereby even at AAA would have been an example of incredible stupidity..... Of course US Government policies particularly involving housing.....and the supposed stewards of public protection called the SEC...."Securing Employee Compensation" are involved....and causal as well..... But the brains that knew better are at the very core of the problem.... Next in line is the fake economy of the US via Alan Greenspan which is also to blame....in that both the government and the population were stupid enough to think that the increase in the ability to incur debt was to be seen as an increase in wealth....How stupid is this ? Perhaps 2/3's of gross sales in the last 17 years was due to debt....not wealth.... .......................................................... What should emerge are prices of everything that would reflect an elimination of this debt....and it is a very sad state of affairs when the head of the government rescue package number one concern is to increase the value of Goldman Sach's common stock, who took the public service position in order to capture a several hundred million tax advantage for taking the position predicated on the value of GS stock to be kept at a high enough level.....to be sure public service was not in mind....by this individual.... ..................................................... What the US should do.... Do not forward the cost of trying to maintain previously higher prices to their children's children...... Start over....and do it better this time.....many lessons were learned the hard way..... Focus on..... A change in tax structure that promotes capitalism and individual freedom......Install a simple 10% consumption tax.....to be managed by each township....Eliminate the IRS....and all other taxes.... Eliminate the 2/3 party system and govern by township.....turn Washington into just another township and convert the government buildings to condos....Form a true democracy.... With a 2/3 party system....long term projects that are needed by townships....and the desires of the locals....will never get done.... The 2/3 party system is a failed concept which serves special interests and a few individuals....It is not a democracy...... ............................................... Eliminate the Federal Reserve ....and form a true currency......the dollar is the same as trying to build on shifting sand.... ................................................ Establish a true stock exchange that is world wide whereby the information is unbiased and uniformly available....with modest leverage options.... ................................................. Establish localized banking....whereby the bank actually knows the people that they lend to ... discounted asset based lending.... ............................................... Most of all....do not allow the current bullshit system to continue.......the price to pay will just get higher every day that it stays in existance....... And most importantly...promote solutions by capitalism......whereby the individual has property rights, gains or losses.....and can own all or part of his company..... Whereas socialism sounds sweet......individuals will have the right to work for a wage....and never own the companies they work for.....
What the US should do.... ======================= Don't hold your breath. While you did a fine job of identifying the problems I don't agree with any of the solutions. Every individual or corp had a choice, they could be part of the problem or create the problem. The individual had a choice to act or react to improve or mitigate their own circumstances. If they didn't oh well. It's a free country of choices. Inflation is forever, get a better job/education, income trumps inflation. 401k shit the bed, people still had a choice. Letting someone else "do it for you" or "What the US should do for me" is a choice that hasn't worked out too well.
libertad I read an interesting and insiteful quote a few days ago. "Democracy must be more than just two wolves and one sheep voting on what is for dinner!" Sorry I don't remember who said it. Nutsneal
Good post and I agree, but I worry that getting from where we are now to where we want to be without more of the insidious government intervention, or lack of in certain instances, that has primed the pump of excess may cause more pain than is necessary.
Perfect example of the US Fraudulant Banking System....and its support by the SEC...etc... Hey....how much gold ya got in that mine ? This is utter bullshit.....Funny money bonuses....People other than Fuld know how to do this well..... http://www.bloomberg.com/apps/news?pid=20601039&sid=aZE9yF3JayDA&refer=home Just remember this.....these are the people qualifying you for your loans.....telling you how good or bad you are financially.... What a f'n joke......but the joke is on you......