I don’t see a question there, but nothing is stopping you from reopening that thread.
We paid the government lots of money, they used it for other things like trips to Iraq.
Simply adding more regulations isn’t a solution, especially if they aren’t enforceable.
The other problem you’ll soon realize is that the regulations I’d like to see are unlikely to be the ones you’d like to see. The deregulations you are referring to simply accelerated the lack of real regulation during the proceeding 20 years. And if you really want to get into this here, neither party wanted regulations because both parties benefited. The Right got to look pro-business, and the Left got to look pro-poor people. Had the government stayed the fuck out, and accepted that some people aren’t going to get to live The American Dream ™ we wouldn’t have needed the regulations you are talking about.
By far the simplest of all regulations is to state that a lender must have a reasonable capital reserve to cover its loans. Now, that could be replaced instead by requiring that lenders state clearly what their current capital requirement is, so that investors could choose between a bank at 5% and another at 20%.
Obviously this presents a problem when banks start to run out of money available to lend, because then they’d start to get choosy about who they lend to, and will most likely not lend to people with no money to put down, no verifiable income, and a shitty credit score. But those people NEED houses, who are we to say they can’t have one? If the government can buy up some of the bank’s mortgages, it will have more money to lend to crappy borrowers. And so on and so on. Hence the law of unintended consequences as spelled out in the OP.
The US government wanted people to buy houses, and did everything it could to make that happen. Are we really surprised people tried to profit from that?
I see. So government regulations about meat inspections and drug purity are all part of the socialist plot to redistribute wealth. Emack, I am a long standing, card-carrying member of the socialist plot etc. And this is sure news to me.
No, you don’t see, or you choose not to look. We were talking about the mortgage crisis, the term “regulations” were in reference to the repeal of the Glass-Steagal Act in 1999, which oddly enough Bill Clinton admitted he fucked up on (cite).
Well, you better corral that maverick upthread, who’s talking about cigarettes, gasoline, restaraunts, and all manner of sundry other subjects.
Speaking of cigarettes, do you know why the government allows the sale of a known carcinogen? It’s the idea of a company knowingly selling a toxic substance one of those things the government is supposed to protect us against? I can’t find a cite, but I’ve heard quite a few people die each year from smoking.
ETA The fragment of a quote you selected was taken from a conversation about the mortgage crisis. Do try to keep up.
Is your contention that in a libertarian society, cigarettes would be banned entirely ? Because that seems sorta kinda antithetical.
ETA: as for the reason the government allows the sale, well, profit is one reason, but a more important reason is that people want to smoke, and people making & selling cigarettes want to keep their jobs. It’s as simple as that. Ciggies have been grandfathered in, more or less.
Okay, so what they did was illegal. Is your quibble about who monitors and enforces the law? Do you object to having specific people who focus on weights and measures? Because it would seem that this is simply a matter of semantics about police versus Police. Or would your ideal be having the boys in blue monitor and cite people for all laws and regulations?
I’ve seen you trot out this line of argument repeated across all manner of these discussions. It has not worked once, but you seem never, ever to get it. I’m flummoxed as to why that is, because you seem an intelligent person. Yes, we do have and do support regulations by the government. No, they don’t always prevent all bad things from ever happening. Yes, we are aware of that. No, that doesn’t change our support for the regulations themselves. No, the fact that the regulations are in place does not make us blithely go through life as if we are armor-plated and invincible.
It’s like when I have sex with drug-addicted street hookers, I continue to use condoms, even though I know that they are not 100% effective at preventing the transmission of diseases. I similarly engage with businesses with the same mindset - I know that they will fuck me for my money, and that I better be as wary as I can, but it’s nice to have a veneer of extra protection all the same.
So you agree with him that it was a mistake? That’s not very libertarian of you.
So the government wanted more people to buy houses. so they ripped up a load of regulations and rules that prevented the free market offering loans to people who couldn’t afford them. So we’re both agreeing that the government failed in its regulatory obligations and should have regulated more?
You appeared to be making an argument that Fannie and Freddie were somehow responsible for the housing bubble and consequent meltdown. I posted a load of stuff showing that this claim was absolute nonsense. If you’d like to make a post laying out exactly how F anf F were responsible using actual facts and evidence I’ll be happy to reply.
But you can’t expect us to cover for the ‘sins of the Congo’ in regards to its police, infrastructure, and government. As my students would say, “Rules is rules.”
I suppose the government could add an amendment to a trade bill/treaty that outlined the criteria for determining place of origin…? Don’t trade agreements/bills generally get reviewed every few years?
It is my contention that in a libertarian society people could freely ingest as much poison as they wanted to.
And as you pointed out, when the government has a profit motive, it fails entirely at regulating a known poison. For everyone that bitches about poisonous spinach, or arsenic in wells, your government will be happen to look the other way when there is a profit motive, and when people don’t give a shit.
It’s that simple.
And I’ll continue to until you get it. The government can’t follow you around and remind you to tie your shoes. At some point you have to be able to take responsibility for your own actions. That means doing things like verifying the contract you are about to enter into.
All the examples presented represent cases where people don’t want to do ANY due diligence, and when fucked they cry for the government to step in. Do you really need the government to tell you to wear a seat belt? Or to wash your hands?
You’re wrong, and eventually you’ll realize this. Supermarkets are full of idiots blindly reaching into the cooler and grabbing the cheapest pack of ground “meat.” They do this because they think it’s safe, they think it’s safe because the government has told them it is.
And after a recall, if you read the stories, you’ll see lines like, “check to see if the ground turkey you bought was labeled as ___.” People don’t know where the ground turkey they bought came from, they just know it was on sale.
You made a conscious choice to protect yourself. We could all by eliminated AIDS if people made the same choice you made. So why not have the government require everyone having sex to wear a condom?
What’s funny about your example is that people treat condoms as 100% effective, which encourages dangerous behaviour. Without condoms, would you continue to put yourself at risk? Or would you instead choose to have sex with people who could verify they’re clean?
Do you see the way those two scenarios play out? Adding that layer of protection, which isn’t 100%, actually encourages riskier behaviour. And without the protection, people might chose to avoid sex with multiple strangers.
What’s not funny about your behaviour is that people willingly choose to have sex with drug-addicted street hookers, without condoms. Why is that? And how is the government supposed to help save them from themselves?
What if we had a ban on homosexual behaviour, and sodomy? Maybe that would help? If only a country was brave enough to try it.
Government failed. People thought it was looking out for them, but it wasn’t.
More to the point, no one had to buy those mortgages. They could have put down 20%, they could have left equity in their house. Instead, they willingly chose to hang themselves.
If people are dumb enough to buy cigarettes, and the government is happy enough to profit from it, why should the mortgage industry be any different?
Fanny and Freddy were created to buy up mortgages, allowing banks to lend more. And in the process, they privatized gains, while the government backed the losses. As soon as banks stopped holding mortgages, they themselves stopped caring about who they lent to. F and F should have known this.
As a result, banks (and mortgage brokers) went after consumers too stupid to look out for themselves. They allowed smaller and smaller downpayments. They allowed larger and larger equity loans. They let people make up what ever income they wanted.
But at the end of it all, people made the choice to own a house without equity.
I don’t know what your personal motivation for promoting this line of thinking is, but whenever I hear someone extolling the cult of the individual, I always think it would be exactly what a powerful interest would say, if they wanted to exploit the consumer or the workforce. Denigrate the government, urge people to take care of themselves and never work together or combine their political power to oppose special interests that that seek to exploit the consumer or the workforce. Make it sound like working within the political system to limit the power of special interests is a suckers bet, not worthy of a real patriot. Do whatever you can to prevent individuals from collectivizing and discovering they have far more power united than they do divided. Keep them separated, keep them suspicious, promote division and tribalism.
That is what I think of when I hear libertarians talk about individuals sticking up for themselves, instead of creating a government that unites their power. The purpose of government is to protect the weak from the powerful, so I would not be surprised if the powerful promote the opposite as a way to weaken their intended prey.
No, I need the government to tell you to wear a seat belt, and to wash your hands, and to not dump toxic waste in my yard, and to not poison my drinking water, and to not drive drunk… we need government because we can’t trust each other and because it gets tiring to have to watch your own back all the time.
Just like it gets tiring to read posts from “libertarians” about how we should all just watch our own backs all the time, and if anything bad happens to anyone, it’s clearly their fault for not watching their own back 24/7. :rolleyes:
+1
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OK, we both agree that government failed. So then we both agree that the government shouldn’t have scrapped regulations that would have prevented the meltdown/should have enforced existing regulations that would have prevented the meltdown? Yes or no and if not, why not?
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You say that people willingly chose to hang themselves because they chose to own a house without equity. Now the exact same thing happened in the 1920s when the country’s most unsophisticated borrowers were taken advantage of by predatory lenders. The same thing happened in the 2000s when anybody with a pulse was offered a 100% mortgage with a big cash lump sum on top. These people were given mortgages for less than rent money by unregulated, unsupervised lenders who told their marks “don’t worry, you can always refinance when the payment goes up.” Except one day they couldn’t and that started the meltdown. Now it happens that in the 1930s legislation was passed to prevent this happening again, l;ike I said it happened in the 1920s too. And that legislation worked fine and was still on the books in the 2000s. I’ll let the NY Attorney General explain what happened next :
Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers’ ability to repay, making loans with deceptive “teaser” rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.
Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.
Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York’s, enacted laws aimed at curbing such practices.
What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.
Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.*
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html
And after you’ve read the rest, could you please tell me whether you think that the government did the right thing in preventing burdensome red tape stop our finest mortgage companies from offering million dollar mortgages to unemployed meth dealers, or should the government have allowed the states to enforce laws and regulation already on the books?
- Are you aware that when the Bush administration deregulated the mortgage industry so that banks no longer had to hold mortgages to maturity, that the mortgage originators then sold these mortgages direct to Wall Street securities firms who then sliced and diced them into the toxic securities that blew the global financial system up in 2008? That fannie and Freddie had effectively nothing to do with this and the deluge of new mortgages created effectively passed them by? That Fannie Mae lost 56% of her market share in 2006 alone because mortgage originators were bypassing F and F and selling their mortgages direct to a Wall Street desperate for mortgages to turn into securities? So how are F and F responsible for a failure of the private market and regulation of the market? So they were backstopped by the government, so what? How does that make them any different from Citibank or Goldman Sachs and exactly what effect did their government backing have on the situation in the 2000s pre-meltdown?
I would appreciate answers to 1, 2 and 3 please.