I have been seeing a lot of references to “a speculative bubble†Nope. They were not speculating. The crisis consisted of people, mostly members of protected minorities with nothing to lose, buying houses they could not afford with borrowed money in the expectation that they would go up, and if they went down, it was the bank’s problem. So the people who bought houses were taking no risk, since mostly …
Category: economics
The problems with Laissez Faire sexuality
In traditional society, women were strongly encouraged to refrain from sex before marriage, and marry responsible men with good jobs who were able and willing to support a family. Today, women are encouraged to follow their hormones, which tends to result in them have offspring with a long succession of sexy males who disappear, often into jail or dying violently, and who often rough them up and steal their money …
The crisis has barely begun
“Naked capitalism†explains what has happened, and observes that the Bush-Obama policies caused it, are causing it, and are likely to cause a lot more of it. Government guarantees will be abused – and the broader the guarantees, and more chaotic the situation the more they will be abused. The solution is that existing guarantees must be reduced, and existing government initiatives curtailed or at least allowed to expire.  Extensive …
Obama plans massive permanent reduction in US standard of living
Under current USA nuclear regulations, you cannot launch any new nuclear projects unless the waste is going to go to a federally approved repository, and Obama has announced there is not going to be a federally approved repository. Hence no new nuclear projects. Obama has also announced that carbon emissions are going to be reduced sometime soon, though not yet. If less carbon, then less coal and oil. If no …
The Stimulus bill
Bryan Caplan wonders why Brad Delong cannot comprehend those who doubt the effectiveness of the stimulus bill. Assume that creating value is easy, any brainless fool can do it, even the brainless fools at Washington Mutual. It is then immediately obvious that the government can make everything lovely by printing money and giving it to the morally worthy. Are car production lines shut down while unemployed workers idle? Just print …
Warren Buffet explains how to lose a trillion
Warren Buffet explained how to lose a few trillion, here and there. Well managed companies, like Warren Buffet’s, don’t get government guarantees. Badly managed companies with good political connections get government guarantees. So naturally all the capital floods to companies with a track record of losing it.This is capitalism in reverse. For capitalism to work, the people who are good at managing stuff have to wind up in charge of …
The run begins on Europe
Moody’ issued a warning on European banks, which implies that the smart money is moving out of the worst affected banks: Eastern European banks, and Western European banks with a lot of exposure to Eastern Europe.This, in turn, is putting pressure on European government bonds, as speculators doubt that European governments will be able to bail out their banks, or will go broke attempting to do so – the most …
Chinese becoming wealthy, Americans ceasing to be
Captain Capitalism explains why Chinese are becoming wealthy, and Americans ceasing to be.
The lesson of Japan’s failure
Ten years ago, Japan had a banking crisis very like the one we just had. It was discovered that financiers and big businessmen had blown staggering sums of money, whereupon the government massively intervened to keep those that had screwed up from losing their jobs. The Japanese economy has been stagnant ever since, even though, or perhaps because, the government has poured huge amounts of “stimulus†over the economy, so …
The cause of the crisis
In numerous posts, I have argued that CRA affirmative action caused the economic crisis that is happening now. Vdare provides a far better post than any of mine, giving us case histories and numerous horror stories of bank?s proudly pissing away stupendous amounts of money, and boasting of their wonderful CRA compliance in so doing. The bank?s boasts of trillions of dollars gives the lie to the much repeated claim …