[elTwitcho]

Originally Posted by scumquat1

For a college grad, you really have a reading comprehension problem. I originally stated the following: “The government puts policies in place that help to create the sub-prime mortgage problem.” And then I summed up my second post by saying this: “So, clearly the government played a large hand in creating the sub-prime mortgage mess.”

Neither of those statements absolves the mortgage banks of their share of responsibility in this matter, but that’s apparently a subtlety way beyond your ability to understand.

I only glossed over most of your post, because the important part is in bold. Thanks for agreeing with me.

Originally Posted by scumquat1

Another fact that is simply undeniable is that this industry is already heavily regulated. Apparently the regulations failed to prevent this mess and so the solution is to pile on more regulations. Brilliant!

Kind of like how even though there is traffic laws we still have accidents, so the solution is to completely remove any restrictions on what you can do behind the wheel. Brilliant!


And I post because you make such bad arguments and I clearly don't have the disciple to let it drop after you say something idiotic and assume a lack of a response means that you've won. Call it a character flaw on my part

[scumquat1]

Originally Posted by elTwitcho

I only glossed over most of your post, because the important part is in bold. Thanks for agreeing with me.

LOL, nice post. I suppose at this point, having lost the argument, the best tactic is to declare victory and retreat.

Originally Posted by elTwitcho

Kind of like how even though there is traffic laws we still have accidents, so the solution is to completely remove any restrictions on what you can do behind the wheel. Brilliant!

The problem with your analogy is that capital is mobile. When you overburden it with regulations, taxes, etc..., it leaves. If you'd like to drive capital away, increase regulations on these industries. That way nobody will be able to get a mortgage.

You also continue to ignore the fact that the mortgage and banking industries are already heavily regulated. Despite this, the solution is apparently to pile on more regulations. Wow, not very bright.

[elTwitcho]

Originally Posted by scumquat1

You also continue to ignore the fact that the mortgage and banking industries are already heavily regulated. Despite this, the solution is apparently to pile on more regulations. Wow, not very bright.

Since the crisis was not caused by regulations but by irresponsible lending practices, it makes alot more sense to put in regulations so the banks don't get into the same mess again than it does to remove all regulations and say "alright guys, your judgement was pretty bad on that last one, so we're going to give you guys even more autonomy and you know... hope you don't do the exact same thing you've already shown to have a propensity for".

Yes, that makes much more sense

[scumquat1]

Originally Posted by elTwitcho

Since the crisis was not caused by regulations but by irresponsible lending practices, it makes alot more sense to put in regulations so the banks don't get into the same mess again than it does to remove all regulations and say "alright guys, your judgement was pretty bad on that last one, so we're going to give you guys even more autonomy and you know... hope you don't do the exact same thing you've already shown to have a propensity for".

Yes, that makes much more sense

No, the crisis was caused in large part by government interferene in the market, which inevitably creates distortions. That interference came in the form of regulation and subsidies and/or tax breaks and creating quasi-governmental agencies that funneled capital into the industry. At this point, the best solution would be to let the banks and investors take their losses and peel back the regulatory morass that helped cause this in the first place. When they are allowed to function, markets do an excellent job of compensating investors for taking risk. Inherent in the risk/return relationship is the fact that you don't always win the game. Many of the bail out plans floating around now will simply add regulations and prolong the problem.

Every economic "crisis" doesn't demand a new agency or set of regulations to prevent it from happening in the future. Markets move up and down. If we add regulations every time they move down, we'll kill the goose that lays the golden eggs.

That's your lesson in economics for the month. Now go away happy that you're a smarter person than when you woke up this morning.