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February 6, 2010http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20100121/FREE/100129968/0/STATIC
Once again, President Obama completely missed the mark on the causes of and solutions to the financial crisis. In his speech this morning, the President outlined a major initiative to increase regulation of banks. He claims the financial crisis was caused by reckless speculation by greedy bankers in search of quick profits. What he fails to acknowledge is that this behavior was the direct result of the cheap credit supplied by the Federal Reserve and the moral hazard supplied by government regulations and subsidies.
In his efforts to prevent the next financial crisis, the President is focused on the symptoms rather than the disease. Therefore, his attempt to prevent future financial crises is doomed to failure, as the misguided policies that led to the last crisis are preserved while even more damaging policies are added. Current Fed policy is more reckless than before; continued subsidies to the mortgage market and the bailouts for banks are creating even bigger moral hazards; and, as a result, the economy is even more leveraged and more vulnerable to rising interest rates than ever.
The only way to prevent another financial crisis would be to reverse the fiscal and monetary policies that lead to the last crisis, and which now threaten to bring on an ever larger one. However, this Administration seems to lack the brains or the guts to do it.
http://www.youtube.com/watch?v=zdVP_sgCETo
Yes government regulation and government creations fannie and freddie allowed the housing bubble to happen.
Horaayy..there are 4 comment(s) for me so far ;)
Yes government regulation and government creations fannie and freddie allowed the housing bubble to happen.
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yes he is about right as the banks that failed creating the crises were following all of the federal regulations and compling with the spirit of the federal mortgage guidelines designed to spread home ownership to lower income higher risk people. they where doing the best they could to follow the law and spread the risk to protect themselves at the time of the crises, we need to question the laws that they were following to their own destruction more than we need to investigate and punish the bankers.
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He could be right.
He could be wrong.
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No Matter what you do in life, Pro Active is always better than reactive. That is
the difference in Treating the problem and Not eliminating the reason for the
Problem. This is what Obama has done in everything he attempts. He trys
to put a Band Aid on a 5 inch wound. Won’t work.
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