This sums it up pretty well

Money quote:

For the Fed and the Bush Administration, the answer to what they were thinking is easy: they needed the profligate borrowing to keep the economy going, even with Bush’s huge deficit spending. The game was called “kick the ball down the road”.
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Just as many people have said for years: The illusion of the bush economy was propped up on a mountain of bad debt (both public and private) and massive borrowing.
 
I really do remember many on here scoffing at the warnings of how they were proding the economy along on the backs of these types of loans instead of acting like adults and implementing the protects which would have avoided this mess.
 
Desh said:
So you know better than this author?
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Yes.

The author clearly has a bias and wants to blame the current Bush Administration (which rightfully deserves some of the blame). But the author fails to point out the rest of the culprits. Those that did away with Glass Steagall in pieces over the past two decades. The Clinton administration for doing exactly the same stupid bullshit that Bush has done.

Most importantly the borrowers who continued to spend beyond their means (a lesson they probably learned from the idiots in DC) and the lenders who allowed them to take out such loans all for the sake of short term profitability.
 
Desh said:
He is no more biased than you and far better educated and experienced.
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1) While he may hold a "higher" degree in economics, that does not equate to his understanding of economics being greater than mine. Being a professor does not equate to "experience".

2) How is it that you think I am biased Desh? Is it the fact that I blame both parties, the borrowers and the lenders? Whereas he blames Bush and the lenders?
 
Are you ignoring hiw experience in the world Bank?

Super it is time for you to realize you are not the top authority on economic analysis.

You can call people stupid and idiot all you want and it does not change the fact that others whos experience and education which eclipse yours differ greatly from your opinions.

Your "intelligence" on these matters is completely self created.
 
Borrowers were told not to worry about their mounting debt. With prices going up year after year, the more they borrowed, the more they made. What was true was the more they borrowed, the more the mortgage brokers and the banks made. It was, in a sense, an old-fashioned pyramid scheme: prices simply couldn’t go on rising, especially as the real income of most Americans was actually declining. Low interest rates fed the bubble, but that was not enough: the Chairman of the Fed actually encouraged people to take out variable rate mortgages (where payments would go up as interest rates increased), just when interest rates were at an all-time low. They had only one way to go, and that was up.

I love how some will pretend many of us on the left who were warning that this would not end well were told things like "more millionaires then ever" and the like.
 
strange how with some the negative stuff on the current economy is just liberal doomer stuff but any positive stuff is fact..
That darned liberal doomer Bernanke!
 
I remember when Desh was posting speeches from David Walker Comptroller General of the United States, who warned that the massive borrowing and debt policy of the Bush Administration and republican congress was heading us for the cliff, that many rightwing bush fans laughed Desh off.
 
Desh said:
Borrowers were told not to worry about their mounting debt. With prices going up year after year, the more they borrowed, the more they made. What was true was the more they borrowed, the more the mortgage brokers and the banks made. It was, in a sense, an old-fashioned pyramid scheme: prices simply couldn’t go on rising, especially as the real income of most Americans was actually declining. Low interest rates fed the bubble, but that was not enough: the Chairman of the Fed actually encouraged people to take out variable rate mortgages (where payments would go up as interest rates increased), just when interest rates were at an all-time low. They had only one way to go, and that was up.

I love how some will pretend many of us on the left who were warning that this would not end well were told things like "more millionaires then ever" and the like.
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Is any blame to be put on the borrowers? If I make $30k, would it be realistic to carry credit card debt at 9%APR over $10K, while having a mortage and taxes at over $1200? Not even going into car payments, utilities, etc. When should common sense kick in?
 
Desh said:
Are you ignoring hiw experience in the world Bank?

Super it is time for you to realize you are not the top authority on economic analysis.

You can call people stupid and idiot all you want and it does not change the fact that others whos experience and education which eclipse yours differ greatly from your opinions.

Your "intelligence" on these matters is completely self created.
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No Desh, I do not ignore his time at the world bank. Political appointments do not impress me. He has written some good books on economics. But that does not change the fact that his article is clearly biased. Having worked for Clinton he obviously does not want to put any blame on the changes to the Glass Steagall act that occured during Clintons terms. He also attempts to place the blame solely on the lenders for "tricking" the borrowerers into taking out more in debt.

You just like to cherry pick biased articles that place the blame on Bush and the lenders. You CHOOSE to ignore the fact that they are not the sole culprits. Because you are a biased hack and have little comprehension for economics. You just like the article because he blames Bush. That does not change the fact that his article is biased or that others had a hand in the current debacle.

Or are you suggesting that the changes to Glass Steagall are not relevant? Those comments you make about Bush/Reps should have done more to regulate the housing market..... guess what Desh.... that is exactly what Glass Steagall did. But thanks to Bush/Clinton/Bush, they slowly chipped away at it so that they could proclaim "more people own their own homes".

So enough of your partisan bullshit Desh.
 
Desh said:
Borrowers were told not to worry about their mounting debt. With prices going up year after year, the more they borrowed, the more they made. What was true was the more they borrowed, the more the mortgage brokers and the banks made. It was, in a sense, an old-fashioned pyramid scheme: prices simply couldn’t go on rising, especially as the real income of most Americans was actually declining. Low interest rates fed the bubble, but that was not enough: the Chairman of the Fed actually encouraged people to take out variable rate mortgages (where payments would go up as interest rates increased), just when interest rates were at an all-time low. They had only one way to go, and that was up.

I love how some will pretend many of us on the left who were warning that this would not end well were told things like "more millionaires then ever" and the like.
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The main culprit shouting about more millionaires is another LEFTY Desh.

As for the "borrowers were told not to worry about their mounting debt"... that is bullshit. It makes the assumption that borrowers are too fucking stupid to understand that they have to pay back the debt or that ever increasing debt is a bad idea.
 
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