Associate
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People borrowing what they cant afford and petrol prices
What do you think caused the recession??
- Thread starter rz30
- Start date
We know what happened. I wouldn't blame greed here.
Main causes were
Sub-prime mortgages. (poor structure, the risk was not evaluated properly, in fact nobody cared for risk as seen as house prices were rising)
Risk-loving incentives.(short-sighted policies)(this is not greed, if market gives we take, one would be stupid not to pursue the maximum revenue)
and third one I forgot
There were a lot of other minor stuff.
Main causes were
Sub-prime mortgages. (poor structure, the risk was not evaluated properly, in fact nobody cared for risk as seen as house prices were rising)
Risk-loving incentives.(short-sighted policies)(this is not greed, if market gives we take, one would be stupid not to pursue the maximum revenue)
and third one I forgot
There were a lot of other minor stuff.
Soldato
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Call of Duty
This documentary will tell you what caused the recesion and just about every other recession in recent history :-
The Money Masters
Very, very prophetic to say it was made back in 1996 as well.
Should be mandatory viewing for anyone entering a voting booth.
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I've just watched the first few minutes so far but I'll make sure I see the rest.
Soldato
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A massive expansion of debt over many years meant that people and their governments were able to live better today, expecting tomorrow to be able to pay for it. Unfortunately tomorrow has arrived and there has been no magic source of growth to pay for that debt. All the real growth (rather than borrowed growth) has been in the East.
What is going on now in the West is the slow, painful realisation that -- having lived beyond our means for many years -- we now have to live below our means for long enough for inflation to destroy our earning power and make us competitive with the East, where labour is so much cheaper than here.
It's going to be a long, hard path, and things like the Obama speech tonight -- no matter how well intentioned -- are just part of the whole "bread and circuses" thing.
The good news is that the important things in life are still free. Friends, family, fresh air. Food is still cheap, despite recent price hikes, and the only bit of the basic equation for life which is wildly messed up is the price of putting a roof over your head.
But that just makes the friends and family part of the equation even more important... at least until the politicians wake up and realised that depleting the council housing bank made us poorer as a society, not richer.
What is going on now in the West is the slow, painful realisation that -- having lived beyond our means for many years -- we now have to live below our means for long enough for inflation to destroy our earning power and make us competitive with the East, where labour is so much cheaper than here.
It's going to be a long, hard path, and things like the Obama speech tonight -- no matter how well intentioned -- are just part of the whole "bread and circuses" thing.
The good news is that the important things in life are still free. Friends, family, fresh air. Food is still cheap, despite recent price hikes, and the only bit of the basic equation for life which is wildly messed up is the price of putting a roof over your head.
But that just makes the friends and family part of the equation even more important... at least until the politicians wake up and realised that depleting the council housing bank made us poorer as a society, not richer.
Always the easiest thing to blame. People should take responsibility for their own actions, we're a mixed economy and so is the US, most the the economy is privately owned by individuals - not the government. With too much government policy people will cry out that there is no freedom.
Maybe you a pro Communism?
Well it's government's job to regulate. If it fail to do it's job ( and it did) it's only fair to say poor regulation is to blame, is it not?
To an extent, yes.
There is no perfect economic system, and every government in a mixed economy has major problems.
A government can't do a perfect job in an imperfect economy.
If it's a fancy way to say America's poor regulation caused the whole thing and the UK simply got dragged in then yeah that's the case, can't be blaming the UK for USA's moronic decisions by G.W. Bush
If I take that statement at face value then I'd say it's the government job to perfect the economy.
It's like during soviet war...well at least according to enemy gates
- either fight or you get killed by your own. The UK is just like a soldier had to follow orders and hope the general was right, ain't nothing he can do.
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No it's not a fancy way of putting it at all, although you are making the wrong assumptions from what I'm saying.
You really need to have an open mind with economics, George Bush didn't cause the worlds economic recession nor did the US. They may have been the start of what led to it, but it wasn't their fault. It's the economic systems that exist today.
But if you want to point at one thing specifically then many might say it was what happend with the Lehman Brothers that triggered the chain reaction. But others might say that's because people didn't keep up with their payments every month.. and others might say thats because banks would offer more money than people could actually afford when taking out a morgage or a loan.
What this leads to is that the economy isn't perfect. And it can't be perfected until something better comes along.
A government could have tighter regulation - but these mistakes were made by private companies after a profit. And when it went wrong, many just blame the government - who are there for us, not against us.
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I stated the reasons for recession earlier, all of them traced back to poor regulation.
Of course the government is their for us, who said otherwise? However economic decisions when Bush aministration moved and his decision of war on terror cause hell of a lot of problems.
You keep making a point economies are imperfect, well done Sherclock lol
You know why we got regulatory bodies? Because markets have to be regulated, they're imperfect, everybody knows that. When I say government is part to blame is because they clearly made a mistake of being short-sighted and over optimistic. The latest example is dragging the deal on debt ceiling, they've been doing it for years with no problems and everybody who knows anything about economics knew they were going to raise it in the end, there was absolutely zero chance of any kind of default yet the morons dragged the process and scared the crap out of general public, you think that decision helped the consumer confidence in the USA?
I hope you got the point that economic system IS imperfect and regulatory bodies are there to not let that imperfection cause what happened in 2007/2008
Edit: Mind you in my original post where I stated the reason I did not say government was to blame, but blame is traced to government. All in all in is perfectly acceptable to say that governments are partly to blame for the recession. Hence I found your "Always the easiest thing to blame. People should take responsibility for their own actions" comment quite unfair.
Also inbefore you start screaming communism, nobody is saying we need excess of regulation, nobody needs this clutter and banks will as they always have just work around the system, but when you make a mistake of poorly regulating sub-prime mortgages you are really asking for trouble.
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I stated the reasons for recession earlier, all of them traced back to poor regulation.
Of course the government is their for us, who said otherwise? However economic decisions when Bush aministration moved and his decision of war on terror cause hell of a lot of problems.
You keep making a point economies are imperfect, well done Sherclock lol
You know why we got regulatory bodies? Because markets have to be regulated, they're imperfect, everybody knows that. When I say government is part to blame is because they clearly made a mistake of being short-sighted and over optimistic. The latest example is dragging the deal on debt ceiling, they've been doing it for years with no problems and everybody who knows anything about economics knew they were going to raise it in the end, there was absolutely zero chance of any kind of default yet the morons dragged the process and scared the crap out of general public, you think that decision helped the consumer confidence in the USA?
I hope you got the point that economic system IS imperfect and regulatory bodies are there to not let that imperfection cause what happened in 2007/2008
It isn't down to just government regulation, it is poor decisions by those who initially cause the problems - large companies that monopolise the market.
Governments all around the world have bailed out these big businesses, private businesses. This contributes to the "debt ceiling" you refer to.
The biggest contributor to the debt ceiling is and has been budget deficits ever since Bush came to power actually. In any case your second paragraph does not bring any value to the conversation.
You still are missing the point as a company the only thing that matters to you is maximizing the revenue. That driving force is great as it does half the job to create a thriving economy. The other part is filled by regulatory bodies, who know what drives the companies, hence they nudge the companies in the right direction. They're like a parent who points the kid to the right direction. What regualtory bodies did in 2007/2008 is saw a child with a gun and though "Meh it's a sunny day" and let the gun shot through the child's foot. (like that metaphor?
).I can not fault companies for doing what they ought to do in capitalism. You can't simply tell a banker to take it easy and hope everything will be jolly good.
Edit: Also as i said before, "Always the easiest thing to blame. People should take responsibility for their own actions" comment sparked my reply and I am merely pointing out your statement was very unfair.
People shouldn't be held accountable for their own actions? Hell, let those bankers have those big bonuses after all. I mean they contributed to the recent world's economic recession - but it's OK, the government has to bail out the banks and once thats done; we'll just put the blame on the government for not regulating us better
Sorry, couldn't resist 
Hah, Communism isn't a bad as it sounds, it just came 1-200 years to late. Back then the intention of Communism was to provide food, housing and equality for many that were dieing in the street. What we know of Communism today isn't what Karl Marx had in mind when he wrote the Communist Manifesto all those years ago. Certain Russian individuals changed the whole concept of that.
Yes I agree, but when they don't act responsibly, this can lead to an economic recession.
The second paragraph is a contributor to the increase of debt, it may not be the biggest contributor, but it is one. So as for my comments being of no value - that is you're opinion, but it is a fact that has led to increased government debt.
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People shouldn't be held accountable for their own actions? Hell, let those bankers have those big bonuses after all. I mean they contributed to the recent world's economic recession - but it's OK, the government has to bail out the banks and once thats done; we'll just put the blame on the government for not regulating us better
Hah, Communism isn't a bad as it sounds, it just came 1-200 years to late. Back then the intention of Communism was to provide food, housing and equality for many that were dieing in the street. What we know of Communism today isn't what Karl Marx had in mind when he wrote the Communist Manifesto all those years ago. Certain Russian individuals changed the whole concept of that.
Yes I agree, but when they don't act responsibly, this can lead to an economic recession.
The second paragraph is a contributor to the increase of debt, it may not be the biggest contributor, but it is one. So as for my comments being of no value - that is you're opinion, but it is a fact that has led to increased government debt.
Do I really have to repeat myself or can you re-read what I wrote and actually read it this time?
Lets start from the bottom. We are talking about whether it's fair to say the government is part to blame for the recession. Debt ceiling contribution is of no value to that.
Secondly you said companies should act responsibly. The good thing about capitalism we don't have to rely for individuals to be "good" and "responsible" its naive to think that humans are capable of that when it comes to markets.
What we do is force them to be "responsible" that's called regulation. EDIT: To extend that point, we regulate so that we don't have to rely on the unreliable good-will. We point the crazy killing machine that is profit maximization in the right direction. If you do pointing right(which is the only thing that you can do reliably) then all is good.
In reality you do understand and probably agree that government is part to blame, which why all of this discussion was started between me and you. Shall we end it at that rather than go about communism and debt ceilings contributors, which really has nothing to do with why I replied (in before you say I brought up the debt ceiling - I brought up an example of irresponsible behaviour of the US government, that was the aim).
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Have I hit a nerve?
Partly to blame of course, wholly? No. That was why I posted in the first place. There is no doubt things could be done better and I agree with you.
My point I'm making is whilst the comments you made here are true, I have said that if they would be responsible I'm certain the economy would grow year on year, not shrink every decade. Again, you're statement is correct. My comments are that people SHOULD be responsible.
And again I agree. My point was that if people were responsible, things would be better. But, as you say, business is fueled by greed and profit. It would never work in the type of economy we use today.
Yes indeed the government is part to blame.
We haven't really gone on about communism, and as for the debt ceilings. it was relevant to the discussion.
I have found it quite amusing how you've said "inb4" as if you can anticipate my reply, I'm not interested in internet fights but I'm more than happy to discuss things as this, as long as opinions don't turn into arguments.
It seems I have a more philosophical approach to this where as you go by how things are.