OT: What Caused the USA Recession?

[Voyager]

Everyone seems to have an opinion on this topic. Let's hear yours. Vote for the answer that you think is the single biggest cause of the recession in the USA. If you don't think it was caused by any of them, tell us what you think it was.

[journel]

how about the democrats for an answer...it started when clinton was at the helm!

[bradwjensen]

Here is the answer to the question, dead on:

http://www.youtube.com/watch?v=2I0QN-FYkpw

http://www.youtube.com/watch?v=8PIEGK0IbA4



This has also played a huge role in why America's gov't has been anything but what it should be:
Lots of people are just very Apathetic to the whole government and how it is working.

It's like people generally forget history, or don't give a damn what their children will be living and dealing with when they grow up.

http://www.youtube.com/watch?v=AhKQ73bY3PA


I hope some of you will also watch this video:

http://www.youtube.com/watch?v=zIOX9IQhL3M

[Gin and Tonic Sky]

Perry wont come back, people got depressed and quit buying ESCAPE LP's the whole world went to hell in a handbasket. Thats why

[wednesday's child]

Wasn't it the Clinton-era relaxation of lending restrictions?
You know, "to help the poorer folk buy their first house" --which is what birthed your subprime clusterfuck...
at least, that's what my impression has been.

wech

[SherriBerry]

This explains how the subprime lending crisis got started and why it wasn't fixed.
A few in government tried to bring about change - you may not believe who.

http://www.youtube.com/watch?v=1RZVw3no2A4&annotation_id=annotation_918789&feature=iv

I don't believe it was the subprime lending in and of itself that caused the recession. It was the greedy buggers on
Wall Street who turned those bad mortgage loans into collateral on CDOs that were artificially rated as safe and then
sold them. Banks, major institutions, cities, etc. thought they were buying into safe investments - it's amazing how many
contain bad assets. It's the same with many mutual funds - if you diversify your investments across cow manure,
pig manure, and chicken manure, it's still a lot of crap.

We've seen how major corporations are often run - the CEOs and executives are essentially looting these companies legally, taking insane bonuses while running the companies into the ground. That money should be reinvested in growing the company. And once the companies are facing collapse, they get more money from the taxpayers to keep going. My only concern is for the pensioners,workers, and lower management if those companies go under - they could lose everything, while those at the top already have nicely feathered nests. I believe in people being paid what they're
worth, but no one is worth a $40 million bonus unless they're curing diseases like cancer.

[conversationpc]

The problems with the economy are a combination of things but, if there is one major contributor, it's probably the sub-prime mortgage crisis. I would shift more of the blame towards the Democrats for it, though there's plenty of blame to go around to both parties dating back to the mid 70s. ALL presidents and Congresses since then have exacerbated the problem.

Let's also not forget that the people of this country are also partly to blame for taking out loans that they should have known they could not afford. Most politicians won't say that publicly but it's true. It just that it's too easy to blame the politicians and the people on Wall Street and corporations for all the problems.

[strangegrey]

Wasn't it the Clinton-era relaxation of lending restrictions?
You know, "to help the poorer folk buy their first house" --which is what birthed your subprime clusterfuck...
at least, that's what my impression has been.

wech

Clinton signed a repeal of provisions within the Glass-Steagall Act of 1933 in November of 1999. Thsee repeal provisions obviously had to be codified by Congress, which was a republican majority at the time. There were guilty dickmunchers on either side of the aisle. Sadly, Glass-Steagall and several other laws enacted between 1908 and 1933 were designed to control and regulate the speculation market....and the gargantuan egos of Clinton and the buffoon congress of 98-2000 felt they were smarter than the original crafters of the law. This is of course, the same fucking cumstain that couldn't stick to the same definition of 'innapropriate relationship with an intern' more than once....

There were tremendously necessary and smart things done to our regulation system in the 30s (and earlier) to prevent speculation bubbles and ultimately, another great depression. When the speculation provisions of GS were repealed by Bubba in 99, it set a brushfire chain reaction that turned into a massive fucking forest fire that Hayseed or any of the dickmunchers we called our government, could smell coming. Make that the first of many mistakes we've repeated since the great depression, to bring about the second great depression which we are and will be living in the next several years.

When Hayseed, YoMama, Bubba, Bubba's wife and all of the other fucking idiots we have elected to run out country start talking about how our regulation system is outdated...what they have not and will not tell you is that the regulation system we HAD IN PLACE was perfectly adequate....they removed the speed bumps from our finantial system because since 1992, the word "recession," became a dirty one. Bubba bent and broke every financial rule in the book to prevent a recession from happening on his watch. Bush carried the very same torch. Hense the various bubbles we've had since Bubba came into office.


Another thing that stings hard, given my background, is the fact that since the SEC was created under the Securities Exchange Act of 1934, an underlying motive of the SEC's chief accountant was to prevent a departure from something called Historical Cost.* In fact, each and every SEC Chief Accountant of the SEC until 1972, was originally hired by the SEC during the great depression...so they all had a strong memory of the depression...and felt that departing from Historical Cost was dangerous. When SEC Chief Accountant John Burton replaced Andrew Barr in 1972, we started shifting away from historical cost....and today, we are NECK FUCKING deep in something called Fair Market Value accounting...or as some will refer to as 'Mark To Market' accounting.

For forty years after the Great Depression, we avoided FMV accounting like the plague...However, just a few years after Enron, we're headed into the second Great Depression...and one of the major reasons is that we have all but abandoned Historical Cost. Sad...

Two major accounting/regulation issues that were guarded for generations after the Great Depression, in an effort to avoid another Great Depression. Less than 9 years since we irresponsibly cast aside these cornerstones of sound accounting policy, we're in the shit......

Bubba's to blame. So's Hayseed....So's our elected officials and representatives from the 90s straight through to today. YoMama's not going to help us either.....

One of two things will happen after this is all over....Either one, we will enter the second great depression and it will be just as bad as the first great depression....or two, it will be a short lived recession/depression, after YoMama and the shitheads he appoints figures out a way to inflate another bubble to get us limping along long enough to dump this problem into the next president's lap.

I've got my money on the later. Hey, without Glass-Steagal, I could probably setup a hedge fund to bet on that very thing...who's with me!?


Sadly, we're repeated more bad history with this financial crissis than any sane person should. I swear to fucking God...someday, we're going to find ourselves in a World War against another Hitler!


* BTW, for those that do not know, Historical Cost is the act of recording assets and liabilities at 'acquisition cost' meaning the cost surrendered for the asset. NOT the current value. This is one of the cornerstones of the framework of US GAAP.

[Arkansas]

The problems with the economy are a combination of things but, if there is one major contributor, it's probably the sub-prime mortgage crisis. I would shift more of the blame towards the Democrats for it, though there's plenty of blame to go around to both parties dating back to the mid 70s. ALL presidents and Congresses since then have exacerbated the problem.

Let's also not forget that the people of this country are also partly to blame for taking out loans that they should have known they could not afford. Most politicians won't say that publicly but it's true. It just that it's too easy to blame the politicians and the people on Wall Street and corporations for all the problems.

Bingo! WE caused the recession ourselves. We all had to have mansions, new Hummers, and trendy clothes. Pure and simple - living too large caused this mess. Our pockets became full of credit cards and our mortgages excessive. Life became all about 'see & be seen'.

We live in self-correcting markets...the way it should be.
People get silly with debt, they pay for it.
Too many people get silly with debt, we all pay for it.

And it's not government's job to bail us out.


later~

[Michigan Girl]

The problems with the economy are a combination of things but, if there is one major contributor, it's probably the sub-prime mortgage crisis. I would shift more of the blame towards the Democrats for it, though there's plenty of blame to go around to both parties dating back to the mid 70s. ALL presidents and Congresses since then have exacerbated the problem.

Let's also not forget that the people of this country are also partly to blame for taking out loans that they should have known they could not afford. Most politicians won't say that publicly but it's true. It just that it's too easy to blame the politicians and the people on Wall Street and corporations for all the problems.

This is a VERY true statement.....I will say, in defense of the people (very small defense) the standards were reduced
to such level that many people were lead to believe they could afford these mtgs. They became idiots when they placed their greed before any common sense they may have had !!!

[RedWingFan]

The problems with the economy are a combination of things but, if there is one major contributor, it's probably the sub-prime mortgage crisis. I would shift more of the blame towards the Democrats for it

You wouldn't happen to be referring to this guy would you????

http://www.youtube.com/watch?v=FCEF-dNdeXo

Hilarious!!

[stevew2]

When Friga replaced the whale everything went to hell

[Arkansas]

When Friga replaced the whale everything went to hell

Ya know, there may be something to this theory.
We were in the black, while he was red.
He went black and we went in the red.
Interesting...


later~

[strangegrey]

The problems with the economy are a combination of things but, if there is one major contributor, it's probably the sub-prime mortgage crisis. I would shift more of the blame towards the Democrats for it, though there's plenty of blame to go around to both parties dating back to the mid 70s. ALL presidents and Congresses since then have exacerbated the problem.

Let's also not forget that the people of this country are also partly to blame for taking out loans that they should have known they could not afford. Most politicians won't say that publicly but it's true. It just that it's too easy to blame the politicians and the people on Wall Street and corporations for all the problems.

I agree that the sub-prime mess was one of the lit matches that started this...but without the rampant speculation on mortage securities, the damage would be contained...

Warren Buffett (even though he's a douchebag) said it correctly when he referred to the derrivate as a "financial weapon of mass destruction..."

[The_Noble_Cause]

The exaltation of deregulation and free market casino capitalism.

While there seems to be some agreement that the Graham act, which got rid of Glass-Steagal, is to blame, its worth noting that Phil Graham was Jon McCain's senior economic advisor. The same person who repealed Glass-Steagal was a couple electoral votes shy of being this country's Secretary of the Treasury...and aside from a few vocal lefties during the campaign, nobody cared.

As for which party shoulders more blame, I'll leave you with this quote by America's "doctor of democracy" and honorary member of the 104th GOP Congress, Rush Limbaugh:
"Roosevelt is dead, his programs live on but we are in the process of doing something about that as well.”

As far as I'm concerned, this is just Reaganomics coming full circle.

[Voyager]

One of the things that I forgot to add to the list was the loss of manufacturing jobs that have been moved to other countries. There is a percentage of our workers that are not qualified for much more than factory work. What happens when the factories move away? The factory workers are left jobless without many other prospects of work.

How can our economy survive if all of the manufactured goods we are buying are being purchased from other countries?

[Gin and Tonic Sky]

Ron Paul has an interesting theory that the current crises are caused by the abandonment of the gold standard in 1971, which was something which combined with a Keynesian approach caused chaos - the stagflaton of 1974 and 1980. When a supply side approach was followed the effect was less exasurbated , but now that we have turned back to Keynesianism - (the bush policies in his second term) we have chaos again.

Go back to a gold standard, cut governement spending, and put real tax cuts in place which encourage long term investments and savings would fix the economy.

[Rick]

The spike in gas prices set the ball rolling for the tumble. The subprime lending mess wasn't the only thing. Plenty of people with prime mortgages defaulted as well.

[Onestepper]

It's remarkable that people honestly believe that this was caused by a specific political party or a pundit's belief system.

[The_Noble_Cause]

...or a pundit's belief system.

Legislation has consequences, and Limbaugh's "belief system" to nix gov't safety nets (financial and social) has not been left strictly to the realm of ideas.

[jrnyman28]

Let's also not forget that the people of this country are also partly to blame for taking out loans that they should have known they could not afford.

Ding Ding Ding

When I pre-qualified for a loan I was offered up to 220k to buy a house. I KNEW I could never afford those payments. I bought a 180k house and still struggled when the ARM adjusted and I couldn't get refinancing because the banks were already running scared.

[Onestepper]

...or a pundit's belief system.

Legislation has consequences, and Limbaugh's "belief system" to nix gov't safety nets (financial and social) has not been left strictly to the realm of ideas.

The potential of gov't safety nets being reduced or eliminated have nothing to do with this recession. For someone that you so vehemently hate, you sure know everything about what RL says and does.

[Voyager]

Let's look at the big picture for a moment. We've spent a trillion on wars since 2001, and we're upside down $700-billion on the failed mortgages. During that same time we exported more manufacturing jobs out of the country than ever before. Now that we buy most of our manufactured goods from China, they have become our lender and we are exporting our wealth to their economy. Then gasoline prices doubled over a short period of time. Even though all of this happened, it still wasn't yet a complete recipe for economic disaster. God spared us His wrath until Journey decided to re-record the Classics. That was the straw that broke the camel's back. When God saw it, He was mad, and He smited our economy with a crippling blow. I know this because Jesus spoke to me.

You hear that Fro? It's all your fault!!

[Onestepper]

Let's look at the big picture for a moment. We've spent a trillion on wars since 2001, and we're upside down $700-billion on the failed mortgages. During that same time we exported more manufacturing jobs out of the country than ever before. Now that we buy most of our manufactured goods from China, they have become our lender and we are exporting our wealth to their economy. Then gasoline prices doubled over a short period of time. Even though all of this happened, it still wasn't yet a complete recipe for economic disaster. God spared us His wrath until Journey decided to re-record the Classics. That was the straw that broke the camel's back. When God saw it, He was mad, and He smited our economy with a crippling blow. I know this because Jesus spoke to me.

You hear that Fro? It's all your fault!!

Now this guy gets it!

[The_Noble_Cause]

The potential of gov't safety nets being reduced or eliminated have nothing to do with this recession.

There's a variety of scholarly material on the repeal of Glass-Steagall, but none put so succinctly as StrangeGrey's post at the top of this thread.
I suggest you start your remedial political education there.

For someone that you so vehemently hate, you sure know everything about what RL says and does.

Unavoidable Starbucks-like ubiquity is one of the advantages of being on 600+ stations.

[Onestepper]

The potential of gov't safety nets being reduced or eliminated have nothing to do with this recession.

There's a variety of scholarly material on the repeal of Glass-Steagall, but none put so succinctly as StrangeGrey's post at the top of this thread.
I suggest you start your remedial political education there.

Thanks teacher. I'm so lucky to have you as my mentor. Like I said, the fact that you want to blame a pundit and his or her ideas for this economic mess is your choice. Doesn't mean we have to agree.

For someone that you so vehemently hate, you sure know everything about what RL says and does.

Unavoidable Starbucks-like ubiquity is one of the advantages of being on 600+ stations.

If I don't like what someone says, I normally have the ability not to listen to it. I'm sorry you don't have that level of self control or intellectual capacity.

[Rick]

Let's look at the big picture for a moment. We've spent a trillion on wars since 2001, and we're upside down $700-billion on the failed mortgages. During that same time we exported more manufacturing jobs out of the country than ever before. Now that we buy most of our manufactured goods from China, they have become our lender and we are exporting our wealth to their economy. Then gasoline prices doubled over a short period of time. Even though all of this happened, it still wasn't yet a complete recipe for economic disaster. God spared us His wrath until Journey decided to re-record the Classics. That was the straw that broke the camel's back. When God saw it, He was mad, and He smited our economy with a crippling blow. I know this because Jesus spoke to me.

You hear that Fro? It's all your fault!!

[SherriBerry]

It's remarkable that people honestly believe that this was caused by a specific political party or a pundit's belief system.

True - too many very bad decisions were made over the past 35+ years to blame one party, as
each one contributed to the mess we now have rippling across the globe. Both sides dropped
the ball on this one. It sounds like the entire financial/economic system needs to be restructured
and returned to a system based on honesty and common sense.

[The_Noble_Cause]

Thanks teacher. I'm so lucky to have you as my mentor. Like I said, the fact that you want to blame a pundit and his or her ideas for this economic mess is your choice. Doesn't mean we have to agree.

Never blamed the pundit.
Never blamed a singular political party.

I WILL say that the pundit's ideas are endemic of a governing deregulatory philosophy that has led this country into economic rack and ruin.
The fact that Phil Graham was recently calling the economic shots for Team McCain, makes the task of connecting the dots and seeing the big political picture all the more easy.

If I don't like what someone says, I normally have the ability not to listen to it. I'm sorry you don't have that level of self control or intellectual capacity.

True, I am a glutton for 100,000 watts of auditory degradation and vigorous drivetime skullfucking.
It's kinda like how you listen to Seacrest Top 40 on the ride home, minus the detours for truckstop sex.

[whirlwind]

A vicious cycle!