1. Actually it was a long & complex chain reaction that started with the Supremes overturning state usury laws. You have to think for a moment, but only a moment: it turned finance into an industry who's practices are limited only by the ethical constraints of its practitioners. Not a good place to be. 2. Huh? I can honestly say I've never heard that bit of logic, the one about the oil price spike.
Whatever you say, brah. "We National Socialists are enemies, deadly enemies, of the present capitalist system with its exploitation of the economically weak ⦠and we are resolved under all circumstances to destroy this system." Gregor Strasser (also StraÃer, see Ã) (31 May 1892 â 30 June 1934) was a German politician in the Nazi Party.
No, like all industries, the finance industry was and is limited by what its customers will pay for access to its products. Anyway, I conceded your 'point' about usury laws and submit that it is irrelevant. If I have a mortgage at 5% and I can't make the payment because I lost my job, the existence or non-existence of usury laws isn't going to matter, unless you set the bar for usury so low that 5% qualifies. The logic of the gas price spike actually isn't something I came up with myself, so you can find further info on it out there. Basically, if you look at where subprime mortgages were written, they typically were further out from city centers than non subprime mortgages, so that the buyers had longer commutes than the average. Once gas prices spiked, those longer commutes started to eat into disposable income, which meant less consumer spending on things other than gas. That lead to layoffs, further decreasing consumer spending and ultimately the bursting of the housing bubble. Since the world is on a quasi "oil standard", which, like the old gold standard, enables the price of a single commodity to act as a brake on the economy when that commodity gets priced too high, it should come as no surprise that the oil price run-up led to a recession.
Obviously, you are free to believe whatever you want, but you don't make a convincing fact-based case for it, so I'm going to just go ahead and ignore it.
Likewise, especially since this is the first time I've ever heard that oddball theory. I mean, you just assert, with no cite to back you up, that subprime mortgages were written for houses that were at a larger distance from city centers. Then you assert, with no cite to back it up, that the chain of causation went from oil to disposable income to layoffs to defaults to the crisis. Extraordinary claims require proof. Proof <> the chain of logic in your head.
Alpharetta, in the greater metro Atlanta area is considered ground zero for this. When my mother took me there, tears flowed. Entire empty neighborhoods. I asked myself, what happened here? In a huff, I left the South, and went to the MidWest. When I came home, she showed me what was left. I was destroyed. And yet, it renewed my purpose.
I don't think Obama meant capitalism doesn't work. Rather, tax cuts for the wealthy don't spur job creation. Either way, he's wrong and not qualified to opine on both.
Don't lots of people believe in "Reaganomics"...tax-cuts spurring huge economic growth? (Was it tax cuts or huge deficit spending?)