Ad Hoc Fed, Treasury Acts Caused the Financial Crisis, Not Deregulation, Tax Cuts

Hi everyone! I read this article as I was traveling through limbo ( as all lost souls shall on Judgment Day) which will last an eternity and I thought I'd comment here. At one time in history I was a powerful emperor in a very powerful country. I had a legislative government very similar to yours my armies conquered far and near and the elitists damn near ran everything. Except for the fact that everything was in Latin it was pretty near a perfect system and society for a lot of us (Christians excepted of course). After reading this article I couldn't believe how this took me back to the good old days where our hedonistic unchecked society of greed and corruption along with orgies of gluttony ran amuck. Oh, I had these little "explainers" to tell the masses why our policies were inept after the fact (after all I didn't need a revolution ....did I?). I had all sorts of yes-men and experts along with analysts of every shape and size to remedy our foul-ups while the slaves and peasants growled louder. I didn't care, I would just toss a few more to the lions. Did I mention how its like looking into a mirror. Did I mention I loved to play the fiddle. I hear music America and I smell smoke. Listen well because your near a crossroads America (wish now I had seen it) that will determine if your "empire" will suffer the same fate as mine did. The Hun's are coming.What will you decide to do to stop them? Anyway,Hell is calling so I've got to go. See you soon suckers......Nero P.S. We had a Hollywood and a huge porno industry and a major sports business too. Did I tell you how much Rome was like you.

Don T. of AZ 9:19PM March 11, 2009

I am sorry to enter in the fray again. I moved to California to work in a job that I received there. Housing was outrageous. So with a family was I supposed to rent forever while my children grow up hoping that housing prices went down.

No. In fact I watched them skyrocket month by month for two years. The longer I waited the more difficult it was to buy a house. When was it going to end?

So I bought a house. Do I not have "values" therefore? Am I greedy? No. No I am not. I am an American trying to provide for my family. That is the worst thing I have ever heard. I work very hard as do many deserving Americans. This should not be the debate.

The American people are casualties to this financial housing war. We the younger non-baby-boomer generation--the generation forgotten by our beloved media--need to buy houses too. My parents did at my age with my salary rated for inflation.

A bubble in housing exaggerates this fundamental problem. Housing costs more and people do not make enough $$$ to buy the housing. The financial institutions create products to alleviate the problem and then people spend more on less house and so on until the "products" and "instruments" fail.

Who lost their values? Me--some American Dad? Or some corporate liar that promoted lies and unsafe "products" on the public.

Ask yourselves that and think hard about where America needs to go to fix the problem.

Because when I go to the store and buy something it better be safe and effective. That is the role of government to make sure "products" are "safe and effective."

The mortgage products and packaged assets were not safe for the public at all. Witness that reality by reading any newspaper.

Whose fault was that?

Oh yeah mine because I don't have "values"

No it was the poor people that don't deserve houses.

It was Fannie. Grow up people.

BK of CA 8:28PM March 11, 2009

The crisis inwhich we find ourselves is one not only of irresponsible leaders and ineffective institutions, but one of values. As politically-incorrect as it is to say so, much of our nation's past success - economic and otherwise - is tied directly to the Judeo-Christian values of our forebearers, as well as what used to be called 'The Protestant work ethic.' These values included the inherent dignity of hard work, moderation, frugality, doing to your neighbor as you'd want done to you, deplayed gratification, and many more. Whether one got these values in a house of worship or from one's family or a community leader, they were the glue that held us together.

Without our values and moral traditions to serve as a check upon our worst impulses, our system has degraded into a winner-take-all jungle, in which the ends justify the means - being rich, powerful, influential.

Our founding fathers, wise beyond measure into the flaws of human nature, build into our system of governance checks and balances to mitigate, as far as possible, the corruption that inevitably creeps into human affairs. None-the-less, Thomas Jefferson, John Adams, and many others noted that our system of government was suitable only for a moral and religious people.

Is it any wonder that now, increasingly secular and immoral/amoral as we have become as a society, that we suffer from our current difficulties?

Pete Farmer of IL 6:37PM March 11, 2009

I've been reflecting about what I said earlier (I apologize for posting multiple times). I agree with the economist Menzie Chinn who has said that the crisis was ultimately the result of a toxic mix of several policy mistakes. But the more I reflect on this, the original problem was the housing bubble that caught the whole financial system off guard (it was in no one's interest to point out that the housing bubble was unsustainable). And then the real question then is what caused the housing bubble to start inflating in 1997? The only thing that matches the timeline is the Taxpayer Relief Act of 1997 which provided amazingly generous tax benefits that ended up promoting a wave of speculative investments in real estate.

But given the number of ideological and partisan comments here, I am struck by the fact that no one has pointed to this most obvious of original causes. The left is too busy trying to blame the financial crisis on deregulation. The right is too busy trying to blame the financial crisis on policies to promote more affordable homeownership. Because of ideological blinders many people (including economists) are missing the most obvious original cause of the financial crisis, and unfortunately because of this, and the excessive strength of the real estate lobby, we are probably doomed to repeat history.

P.S. And for your information, both parties voted in favor of the Taxpayer Relief Act and President Clinton willingly signed it into law.

P.P.S. Anyone who thinks the housing bubble is almost done deflating because the vast majority of subprime ARMs have already reset isn't aware of the gigantic dollar amount of Option ARMs and Alt-A mortgages that will reset in 2010-2011.

Mark A. Sadowski of DE 6:01PM March 11, 2009