Auto Industry - USA

[The Fat Controller]

Sythe, I'm not claiming that the government is blameless. On the contrary, I'm saying that the Fed was largely to blame for the crisis. There were many contributory factors, but it has been clear for years that trouble was brewing. The Fed simply didn't act on this problem. There was a sustained belief that, in a system like this, financial institutions will be able to take care of themselves since they're in the business of calculating risk. Basically, the government failed to act. That, in my mind, is lack of regulation of the financial market causing a problem, not too much regulation.

Your argument that the CRA was responsible for the crisis is what I challenge specifically. The independent mortgage companies weren't subject to any part of the CRA or the "people must own houses" ideology of the government (this is what I mean by independent of regulation). The motive was the short-sighted view to profit, not because the government decreed that it had to be the case.

 

[d 7 x]

This is because of our auto-industries, making gaz guzzling gars, and the stupidity of the rich people, buying them and driving them.

 

[DropKick Murphys]

This is because of our auto-industries, making gaz guzzling gars, and the stupidity of the rich people, buying them and driving them.

Why are people stupid for buying a car they want?

 

[Tgump]

Why are people stupid for buying a car they want?

Because the cars they 'want' suck more gas out of the economy.

 

Sythe, I'm not claiming that the government is blameless. On the contrary, I'm saying that the Fed was largely to blame for the crisis. There were many contributory factors, but it has been clear for years that trouble was brewing. The Fed simply didn't act on this problem. There was a sustained belief that, in a system like this, financial institutions will be able to take care of themselves since they're in the business of calculating risk. Basically, the government failed to act. That, in my mind, is lack of regulation of the financial market causing a problem, not too much regulation.

No. The fed explicitly acted toward an ideal, as the government wishes it to. There was no mistake, just unwelcome consequences.

Your argument that the CRA was responsible for the crisis is what I challenge specifically. The independent mortgage companies weren't subject to any part of the CRA or the "people must own houses" ideology of the government (this is what I mean by independent of regulation). The motive was the short-sighted view to profit, not because the government decreed that it had to be the case.

http://mises.org/story/2963

Whether or not a specific middleman party or group of middleman parties is to blame is totally beside the point. Your argument here is a red herring.

Human nature is geared toward profit; self interest. Ultimately, you can blame everything on human nature, although it gets you no closer to preventing future disaster. Humans are like any other distinct existent with distinct natural behaviors: the desire to survive, the desire to reproduce, and the desire to eliminate or escape threats.

If you apply heat to a liquid, the liquid will increase in temperature. The pressure in the container will increase, and eventually the liquid will boil. This is not because the nasty evil particles suddenly decided to all follow the same set of rules and conspire against their still-liquid peers. It is because the particles in the liquid have a distinct physical nature wherein certain inputs always produce certain outputs. The input -- the flame -- is to cause of the transition from liquid to gas, not the individual particles.

All people are greedy, everywhere. Greed is the life blood of each and every human. Greed is the desire to survive and ensure continued survival for one's own genes. This greed is positive while there is a reasonable balance of power between individuals. When this balance of power is disrupted (by say forming a government and giving it your guns) problems emerge.

So, again, you can blame middlemen all day long, but until you correctly address the real issue: price fixing by government, your argument will never get you anywhere.

Do some research on the industrial history of Hong Kong and Taiwan sometime.

 

[♥__G3rvase__♥]

Hmm auto industry.