How did we get here?

[repeter]

Jobs will go overseas as long as it's cheaper.

If you make it expensive to ship the jobs, it will be of no help, because 1) you'll start a trade war, and 2) even if you don't, the cost of American products will be too high to compete and those jobs will be lost anyway.

Globalization means competing in a global marketplace, and labor isn't immune to that. The price of labor here will either come down, or the jobs will continue to disappear.

That's the in and out of it. There's no way around it.

(Some people make asinine suggestions like unionizing China in order to bring their labor costs up. How do you suggest going about that?)

Yes, that analysis is correct. In today's world market, things are just too expensive to make in the USA. If we deflated our economy for some time, then we could get the jobs back, but thats not a hot option right now, right?

 

[phattonez]

1. The interest rate now is way lower then anything immediately prior to this mess, and now it is helping our economy, so I doubt it did much.

I disagree. I'd say that it's propping up businesses that should have failed long ago. And we are still in a recession with near double-digit unemployment, are we not?

2. Yeah, deregulized sub-prime mortgage market.

So government intervention is deregulation? That's a funny one.

3. I actually did not think of that at all. I don't even know what the rate is right now, on average. Consumer economies always lose, so I'll attribute this to the meltdown.

At the start of the recession savings was near 0. I think it's perked up now so it may be closer to 2%. It's not because of the recession, it's because of the government. After 9/11, Bush basically told people to stop worrying and to keep SPENDING. This government openly supports a policy of non-saving.

4. Yes.

Yeah, I pretty much went on a rant at what happened after the mortgage meltdown.

Now look below.

I don't know for sure what all caused the bubble to pop, but I do know that since Clinton, the mortgage market has been dergulized, great short run, but horrible long run. It allowed Fannie/Freddie to give out loans, which people didn't pay, and it screwed those banks up bad. Then it dominoed. I don't know anything besides that....except that inflation has been extremely low in the past few years, which led economists to believe it had to go up....but that doesn't really mean anything....I guess.

Basically, the party came to a close because either people started to take a profit or people decided that they wanted to save money. When people tried to take a profit on those homes they bought, they found out that there were no buyers (long before the recession started you had homes that were on sale for months with no offers). It's no coincidence that when the recession started that savings went up. When you force people away from the natural demand, you may do well for a while, but eventually people will fight back and try to get what they really want. It will cause a recession, but if you let people do it then the correction will come quickly.

Natural fluctuations in natural order are probably going to go quickly (sans natural disasters, wars, etc.). If you allow the market to respond to this then you will have steady growth with no busts. However, if you try to steer people away from this natural order artificially (as in not convincing them but rather telling people that it is for the good of the country or offering subsidies) then people will eventually come back to this natural order hard and cause a recession (because the economy will need to correct to respond to the new order). Only government can do this.

Lastly, Fannie Mae and Freddie Mac. You say it's deregulation, I say no worries about making a profit. When you have a companies that own 50% of the homes in this country and have no concern about profit, then of course you're going to inflate a bubble. No private company could have done what they did. This was the responsibility of the government. Call it regulation or not, but it is still the government's fault.

 

[repeter]

Lastly, Fannie Mae and Freddie Mac. You say it's deregulation, I say no worries about making a profit. When you have a companies that own 50% of the homes in this country and have no concern about profit, then of course you're going to inflate a bubble. No private company could have done what they did. This was the responsibility of the government. Call it regulation or not, but it is still the government's fault.

This is the only thing I really disagree with.

Government intervention brought the market closer to a free market. More like government intervention removing government interference. And yes, it was the government's fault for deregulation, and allowing them to do whatever the hell they wanted.

 

[phattonez]

This is the only thing I really disagree with.

If that's true then I may convert you yet.

Government intervention brought the market closer to a free market. More like government intervention removing government interference. And yes, it was the government's fault for deregulation, and allowing them to do whatever the hell they wanted.

But here's the difference. The deregulation allowed them to not worry about acting like a company that had to make a profit. They could basically do whatever they wanted without regard to future earnings. Without government intervention, no company could have done that and we would have had less of those bad loans.

 

[creativedreams]

Here is a VERY good video that helps explain what's going on...!

[ame="http://www.youtube.com/watch?v=KMYAeSBPm2E"]YouTube - War for oil or Death of the US Dollar[/ame]

 

[phattonez]

^^This is not the place for conspiracy theories, especially irrelevant ones.

 

[Mach]

Well, here we are, in one of the biggest recessions to come along in a LONG time;

The recession is due to the sub-prime market collapse, and the subsequent domino effect on the housing market, and the finance (banking/lending) industry in general (everyone owned a chunk of the sub-prime).

The sub-prime market collapsed because it lacked the regulation that the rest of the banking industry had in place, that was put in place to prevent this same thing that drove banking under in the past.

It's not due to all the save the planet talk, it has nothing to do with healthcare private or public, nor is it a function of using overseas labor.