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The true origins of our current economic crisis and the fundamental fixes needed to resolve it:

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ddeclue Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 06:28 PM
Original message
The true origins of our current economic crisis and the fundamental fixes needed to resolve it:
Edited on Fri Dec-05-08 06:34 PM by ddeclue
If we still had good jobs in this country then people wouldn't need adjustable rate mortgages, balloon loans, nothing down loans, etc. in order to buy a home because they could save up a proper down payment.

The problems with our economy are:

1) Free trade agreements instead of FAIR trade agreements which eviscerate all the gains of the original progressive era over the gilded era robber barons: ending slave labor, prison labor, child labor, a minimum wage, collective bargaining, health and safety regulations, consumer regulations, environmental regulations, labor laws to protect against over work and exploitation.

2) A lack of regulation and oversight which has allowed Wall Street and corporate CEO's to pervert their book keeping processes and game the system to insure their own bonuses rather than the long term viability of their companies.

3) A failure to prevent mergers which have created these companies which are "too big to fail" and which destroy capitalist competition through monopoly power and which make the merged companies too powerful to regulate and which leave consumers and workers no options and no bargaining power.

4) A dangerous dependence on foreign oil which is bankrupting our country and destroying the environment.

5) A failed corporatist health care policy which leaves 47 million without health care access and overburdens employers. Single payer government run health care as they have in the rest of the industrialized world would eliminate this burden from the companies and employees alike and would cost less and provide better service by cutting out the profit motive middleman.

6) A failed education policy which leaves far too many Americans without viable job skills or job opportunities. We should have lifetime free education for all Americans to get a college education or learn a new job skill - not merely when we become unemployed but rather while we are still working so we will be prepared to switch over when our next job fails.

7) A failed foreign policy which is bankrupting the country by using military force instead of diplomacy. Iraq costs $10 billion per month - at this rate we could bail out the big 3 automakers in 10 weeks worth of war expenses.

8) A failure to provide a living wage which traps people in poverty without any hope of a better job, a house of their own or medical care.

Doug D.
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yourout Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 06:30 PM
Response to Original message
1. K&R.....you nailed it.
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LiberalEsto Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 06:56 PM
Response to Original message
2. Exactly! nt
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slipslidingaway Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 07:13 PM
Response to Original message
3. Excellent K&R n/t
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AllentownJake Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 07:34 PM
Response to Original message
4. On the Wall Street issue
Commodity trading.

The commodity traders pumped and dumped oil. This was actually the start of the crisis. Oil triggered inflation which triggered interest rate increases which triggered the subprime mess. This was the card that was pulled that caused the entire house to collapse on itself.

Demand was a very small part of the reason for the price increasing. The entire high cost of oil can be traced to the commodities floor.
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moondust Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 07:44 PM
Response to Reply #4
6. Why has that changed?
Oil is now down over $100 a barrel from its high. Did somebody slap the hands of those commodity traders or do something else to make them stop?
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AllentownJake Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 07:53 PM
Response to Reply #6
7. The demand justification for bidding it up collapsed
Edited on Fri Dec-05-08 07:53 PM by Jake3463
Also think Tulips in Holland.

Tulips had a value. The value just wasn't what was being paid at the high.

The traders made money on the way down to. Its a strategy...bid something up to a high than sell it short on the way down.

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mrdmk Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 03:31 PM
Response to Reply #6
15. Yes, the Democratic Senate did.
They told Chris Cox of SEC to do his job or else. But is was to late.
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ben_meyers Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 07:38 PM
Response to Original message
5. You have delineated the failures, what are the fixes?
Edited on Fri Dec-05-08 07:39 PM by ben_meyers
I'll give you two immediate ones that should be implemented asap:

Repeal of The Gramm-Leach-Bliley Act of 1999(Financial Services Modernization Act)and reinstate the The Glass-Steagall Act of 1933(regulations passed to prevent a repeat the 1929 crash)

and

Repeal of the Commodity Futures Modernization Act of 2000(the Enron Loophole) and a return to the previous regulation of the commodity markets.

Congress needs to address these two flawed pieces of legislation and quit pointing fingers at each other.

While they are at it, NAFTA and GATT need to be revisited.
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judasdisney Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 05:34 AM
Response to Reply #5
8. Quite simply, reverse the steps that gave us this mess.
You're exactly correct. Especially: RESTORE Glass-Stegall.
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w4rma Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 06:27 AM
Response to Original message
9. Exactly.
1) Tariffs. Huge ones on nations that have poorly paid workers and horrible regulations.
2) Reinstate Glass-Stegall and more.
3) Enforce and strengthen anti-trust laws.
4) Subsidize a green industry, and desubsidize non-green energy.
5) Universal health-care, preferably single payer.
6) Better subsidize advanced education.
7) Pull out of Iraq.
8) Raise the minimum wage and pass laws that help make unions stronger.
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Window Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 07:12 AM
Response to Original message
10. K/R. Well done Doug.
:kick:
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denem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 07:26 AM
Response to Original message
11. FAIL
All the problems you list are fundamental and do need to be fixed but as for depression economic crisis cf 1929

1) Increasing protection
4) Abundant domestic oil production
5) Health care which did not burden business
7) Minimal military spending
8) Adequate wages

could not avert or fix the Great Depression;

Ditto - the Japanese depression of 1990 - 2004.

The fundamental cause is a huge over extension in debt to finance unsustainable speculation. And as everyone tries to get out of debt at the same time, asset prices, consumer spending, investment and jobs plummet.

Ford, GM and GE were 'too big to fail' in 1929 too, and lucky to escape alive. The big banks which WERE allowed to fail killed business after business till unemployment was 25% and people were starving. Not a good look.
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blindpig Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 09:25 AM
Response to Original message
12. In other words...

the problem is Capitalism.
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OneBlueSky Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 10:35 AM
Response to Original message
13. all I can say is. . .
President Obama really has his work cut out for him . . .
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mrdmk Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 03:28 PM
Response to Original message
14. Excellent Post, Here are the Reasons for Your List to be Spot On!
1) To screw the American Worker with a reductions in pay, benefits, and vacations. To make easier for corporations to have free entry and exit from markets without competition, if not here in the U.S.A., in the global economy.

2) All politicians have a hand in this one. The lobby money and campaign contributions are out of hand. Invest a million and get a billion back. That is one Return on Investment if I ever heard of one.

3) See number 2. Also telling government regulations agencies not to do their jobs by a) giving bad information to the general public and b) not regulating commerce.

4) Oil is also extracted from the ground here in the U.S.A. The higher the barrel of oil, more money is made by oil extraction companies. Also, a lot of the oil that is imported to the U.S.A. is refined into different products (gasoline, plastics, insecticides), and then shipped to other counties at a major mark-up.

5) The 3 culprits in this matter are: Insurance Companies, Managed Health Care and Wall Street. Managed Health Care is obvious, give watered down, hard to get health care to a patient and there are profits to be made. The Insurance Companies and Wall Street go hand in hand. Insurance Companies collect premiums from their customers then invest those premium into Wall Street and other investments. Insurance Companies are nothing more than a giant gamble that they can collect more from investments than they have to pay out. Of they regulated by the government just like the banks as to how much money they must have on hand, but once again, see number 2.

6) Ex President now dead Ronald Reagan sum it up best by saying the following, "Why should I pay for some kids education to have opposing views from mine?) Lots of powerful people have the same views as Reagan and why should they have pay for some young punk's education to attain different views from theirs. It is lot easier to bullshit people and get what you want. Bullshitting is a lot less work and lot a less people to pay that are in the know. Why be questioned by a society with critical thinking skills.

7) The Iraq invasion, threating other oil producing counties with war and meddling with other counties politics is more or less fixing the oil market (not to mention other markets.) Think Imperialism.

8) This has to with screwing the American Worker which is explained in number 1. The short sightedness of this is, who are you going to sell your product to? The short term gains are being weighed more heavily than the long term gains. Stupidity at its best.

Thus, I think this sums the Bush Jr. Administration: Stupidity at its Best.
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leftstreet Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 03:53 PM
Response to Original message
16. Capitalism has FAILED
When the parasitic capitalist class fairly RUNS to world governments for $$, what does that say about free markets?

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Joe Chi Minh Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 04:53 PM
Response to Reply #16
17. It tells us: "We can safely abandon the doctrine of the eighties, namely that
the rich were not working because they had too little money, the poor because they had much;"

"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness;"

... both quotes from the late J K Galbraith Snr.

Another fascinating insight, and surely, never more topical, is the following - which, I strongly suspect, makes specific reference to a dearth of statistically-based, sociological studies of criminality among the rich:

"Of all classes the rich are the most noticed and the least studied."
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