So whose fault IS it?

[dnalexander]

I think all of the things mentioned have had an effect on the economy. We the people, all the government, globalization, companies, the fact that the people and market are scared and prone to panicky actions, uncertainty... . The natural cycle of man's economy. Not saying things are not bad. I have heard a quote recently that is something to keep in mind "the day after the complete meltdown of the global economy someone will wake wanting breakfast and someone will want to make it for them." This is a very big complex story even the economist don't agree on cause.

David

Here isa quick blurb of   another factor that I agree is part of it


Economic Breakdown Cycles

Author Howard Bloom talked about the cycles of economic collapse since the 1600s and how the present financial crisis may be solved. Regarding these recurring financial meltdowns that hit society, Bloom said "Every time it happens, the world is absolutely convinced that it has never seen anything like it before. And every single time, the world is wrong." He detailed such events as the "Tulip Boom" which crippled Holland's economy in 1637 and the "Soap and Cotton Revolution" that did the same to England's financial market in 1873.

Bloom explained how his research has revealed that these meltdowns occur approximately every seventy years and form a distinct pattern, which he called a "techno cycle." This cycle sees a new technology or energy source begin to emerge, then it skyrockets and the country behind it becomes an economic superpower. Following that, the technology becomes old and the market is satiated and, soon thereafter, the economy of the country once on top of the boom crashes. While that crash is going on, the next big technological burst is "bubbling up under the surface" and the cycle is beginning anew.

Looking at solutions to the current economic crisis, he noted "usually new technologies involve opening vast new frontiers, but frontiers are not always literal." One such emerging field was what he called the "cyber world," citing the remarkable sales of mini laptops and "smart phones." The other key area where Bloom foresees a technological boom is alternative energy, specifically "solar power harvested in space." He stressed that America, with its homegrown solar panel development and strong space presence, "have the lead right now" but warned "we're letting it lapse because of a failure of imagination." Ultimately, Bloom mused, such forward thinking is "what makes new frontiers out of old emptinesses."

[Warph]

It's just handy to blame it on the democrats now that it has gone bust...........................and since basically a democrat came up with the concept...........SSDD. Nobody wants to blame the crooks who took advantage.....

I did blame the sleeze-bag crooks along with the democrats.  Check this out from the 'very liberal' New York Times article written by Stephen Labaton and published on September 11th, 2003:


The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac—which together have issued more than $1.5 trillion in outstanding debt—is broken.

Guess who opposed this new regulation?  Homebuilders, who didn't want it to get more difficult to get a home loan, and Democrats who didn't want to go back on their demands that everyone (including people who couldn't afford it) should own a home.

Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
''These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.'' 
Representative Melvin L. Watt, Democrat of North Carolina, agreed. 

''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.

Would more government bureaucracy and regulation have fixed Freddie Mac/Fannie Mae?  Who knows.  But what this shows is that the trouble Fannie Mae/Freddie Mac were in has been known to the powers-that-be in Washington for years, and that for whatever reason no fix was ever put in place.

The truth is that this collapse (which, by the way, is worse than Enron ever was except that this time the taxpayers are on the hook) was forseeable from the very day Fannie Mae/Freddie Mac were founded.  I mean, government-backed loans?  Why in the world did anyone ever think that these two companies would engage in good faith business practices when they've known from the get-go that if things ever went south the politicians would be there to bail them out with other people's money? .....Warph

[Teresa]

Good post Warph.. and no offense taken Pam.. You and I are pretty much on the same page..  ..give or take some strands.

[pam]