The way I read this is that blame is still being apportioned to the little guy rather than the banks, the government... and certainly not Bush.  However, the problem still comes back to corporate/bank greed and the fact that the average joe/little guy was always trapped between a rock and a hard place when it came to buying his own home. Firstly: even if he could have afforded a modest home the lending criteria automatically disqualified him regardless; and secondly, property values rose so sharply when he could get finance that he was priced out of the buyers market anyhow.

Furthermore, many people were told that they could buy their own home for less than their monthly rent, which for most was rising constantly due to rising property values and land taxes,..landlord greed while getting little or nothing done regarding maintenance, etc.  So naturally, with interest rates low at the time, and house payments amounting to less than rent, people were going to accept 'too-good-to-be true' mortgage offers to get into their own homes.  And let's not forget, many of them were promised modified mortgages (40 years instead of 30, ect) to make the monthly payment more managable.  They may have walked into it with their eyes open, but opened to to a huge lie and they were deceived into believing the American dream was possible for them.  The banks knew that increased lending would force interest rates up, and thus the monthly repayments, which for most was the straw that broke the camel's back...the killer interest

In either event, banks/mortgages/housing have always driven by greed and the little guy never stood a chance.  If the banks weren't screwing him with high interest, the real estate industry was screwing him by driving up property values to collect higher agent fees and etc... again, greed driven price hikes to make the rich richer.  I mean, why is a house that was worth $75k ten years ago suddenly worth $200k today.. or more?  The average wage/salary hasn't kept pace with that rate of inflation, so now the only people who can 'really' afford to buy a house sre the rich, and thus the gap between the haves and have nots gets wider.  And of course, the US does not believe in government welfare schemes, so as the cost of living and buying a home spirals out of control, what do the average joes do to survive?  Do they emmigrate or die, as capitalist greed forces up the number living on the poverty line and/or well under.

One never said the idiots were not governed by greed.  That always plays a big part.  Its a shame opinion over rules fact.  But like assholes, everyone has one.

What I find is that so many people are correct in this thread. Except WOM...he's a Mod, so what does he know? 

I find this situation distressing.

"What went wrong is back in the late 90's( pre Bush) they wanted the minorities to beable to get loans to buy homes. So the Government ordered Freddie and Fannie to loosen up the criteria so they could get loans. So everyone else say what was happening so they did it too and sold a portion of the loans to Freddie and Fannie. Bush tried to stop it but Barney Frank blocked him in congress. Now thats not the only reason where in deep crap, just one." 

This is true.

However, the problem still comes back to corporate/bank greed and the fact that the average joe/little guy was always trapped between a rock and a hard place when it came to buying his own home.

Furthermore, many people were told that they could buy their own home for less than their monthly rent, which for most was rising constantly due to rising property values and land taxes 

They may have walked into it with their eyes open, but opened to to a huge lie and they were deceived into believing the American dream was possible for them.  

In either event, banks/mortgages/housing have always driven by greed and the little guy never stood a chance.  

Is also true.

Let's let the Federal Investigators do their job and find out who did what and when. Let's not expect instant results.

Let's have meaningful OVERSIGHT and TRANSPARENCY.

So much went wrong because Government was not doing it's job. That lack of oversight is the Bush Admin and Republican Congress's fault. The Democrats didn't do their job either (as a responsible opposition party) and most deplorable was that the "Free Press" was along for the ride, not doing it's job either.

Just as important, when will industry realise that people are not buying new but hanging on to whatever they have, in these hard economic times?

Which begs the question, if people can't afford to buy new cars, why in the hell did the US auto industry get a bailout package?  Makes no damned sense to me.  US cars are not in great demand overseas, thus not great exporters, so what happens to all they produce if they get back to near full production.  Will they just sit and rust in stock yards until they're obsolete, then get melted down until the next bailout comes along?

Yup, it was throwing good money after bad alright... and what's worst, given the capitalist fuelled attitude in the US to government funded welfare payments, the people who need it most will never see an economic stimulus cent. It makes no sense whatsoever for the US gov't to fund consumer industries, yet ignore the consumer base which buys those products. Yup, Kevin Rudd had the right idea with his economic stimulus package, he enabled the consumer base and the increased spending kickstarted the Oz economy again.  We're not out of trouble yet, but it was a step in the right direction.

Unfortunately, i have a sister in law that is driven by greed, (just despise this woman) she has ripped off her own mother (who is in the beginning stages of alzheimers) after her father passed, tens of thousands, to the point where my wife and i had to step in and put my wifes name on all the accounts, so it drives people to do it to their own family members. I still ask the question to myself, "how could you rip off your own mother?"

I agree. "Bottom up" is a good approach. I believe Obama is taking a mixed "Top down" and "Bottom up" approach. It's going to take time...so take a deep breath, mate.

Simple - we want the gold and silver reserve notes back so we have to crash all that paper money markets to do so.

Paper is just that - nothing but paper. So without the money being backed by something - it is not worth a thing.

Like a lot of other things here in this world today. But till it all comes down and crashes to give way to the new system we will all suffer loss and a lot of bad headaches.

Just get rid of the CEO's and the politicians along with those so called BANKERS and the world will do for itself again.

MAYBE?????

@Starkers:

You make good points that are lucid, and I can see where you are comming from in most cases, however, there is one thing that you keep saying over and over in this thread that is bugging me.

No matter what form of government anyone prefers, there will be greed. Greed needs to be squashed, not capitalism.

'No matter what form of government anyone prefers, there will be greed. Greed needs to be squashed, not capitalism.'

Amen.

Oh i would like to publicly thank George W Bush for this wonderful mess he helped to create (cant blame him 100% so i will give him 99 94/100 % like Ivory Soap)

People have tunnel vision, they tend to have short memories and blame everything on the last guy no matter what.  For those that have forgotton, I never voted for Bush for any office he held but I won't blame him for this entire mess we're in.

I speak of capitalists and greed together because, for the most part, it is capitalist driven greed that's behind the issues we've been discussing.  Secondly, I acknowledged that Bill Gates and Warren Buffet are capitalists with social consciences and socialist agendas which are quite generous, so yes, I do know that not all capitalists are necessarily greed driven.  In fact, I think Bill Gates is quite the opposite because his prime philosophy appears to be development, etc.  In other words, he's a doer of things who makes money, rather than a money maker who does things.

And of course not all greedy people are capitalists.  For example, I will always take the largest slice of cheesecake cos I like it more than mrs starkers does... well I dunno she likes it less, but I'm bigger than her so I need it more.

Seriously, you are quite correct, I have met many a greedy person over the years, and quite a few were non-capitalists who thought it their right to have the most, biggest and best because... well just because.

Agreed, there will always be greed, that's a sad fact of human nature.  However, just as familiarity breeds contempt, so does Capitalism in its purest form breed greed, by virtue of the fact that capitalists are profit motivated and driven.  This is why there needs to be some form of Socialist component within government to create the balance required for a more equitable society where all citizens are looked after, particularly the aged, infirm and disabled, etc.  A purely Capitalist society may build the infrastrucure and provide the necessary resources to cater for these people, but not necessarily the means with which to pay. This is where the Socialist component of the govenment steps in... it provides the means so these disadvantaged persons can pay the Capitalists for the use of the facilities and resources.  Socialism and Capitalism working hand in hand to provide for those who can not provide for themselves works quite well in many countries, and it would work in the US, given the chance,

So where would the money come from?  Well everybody pays taxes in one form or another (income, sales, fuel, etc), and if the US cut back on the War budget - we won't call it a defense budget because nobody's going to launch a military attack US soil - the government already has the funds to implement assistance programmes for those most disadvantaged/in need. And the capitalists would have nothing to fear, because social welfare better enables a larger portion of the population to buy/use their products and sevices.  It'd be a win win situation, and eliminating poverty, narrowing the gap between the haves and have nots would likely see the crime rate could drop dramatically, but of course there's the hard-nosed sceptics who believe government should not... can't run anything.

Strange, that! They'll trust the government to engage in overseas wars in Iraq, Afghanistan, Grenada, etc, and applaud it for something that takes life, but not with something that saves lives.  Something seriously wrong with that thinking, seriously, seriously wrong.

I am way over my head in this conversation, but having read the initial post, I feel the need to comment on the bail-out.

From a parent's point of view.

I have four children (two step , to bio) I have seen the negative side of bailing out a kid who gets himself in "too deep too often".  That particular kid is now on house arrest at his grandmothers, after having served some time in prison. No one has held this child accountable for his actions till now (he is now 19).

If he had been held accountable for his actions from day one, he would presently be an upstanding, working member of society. With his intelligence, possibly finishing his third year of college. Because he wasn't, he feels the "world owes him a living" and has no intention of bettering himself.

While the economy is totally trashed, and it's understandable that something had to be done, I feel the bailout was encouraging that mindset of "the world owes me a living". There was no initial accountability, the money was literally just handed out arbitrarily and there was no sign of a consience on either side. Our government has failed us in it's "parental" capacity.(not suggesting our government shouldbe our parents, merely pointing out the heirarchy,.. chain of command if you will.)

The real question now, is what will happen next? Everything else is not relative anymore unless it is duplicated in some way in the future.

I was fearful of how America would survive with our new president, but I have hope that finally someone will be able to stand in that "parental" role and demand accountability , instead of making excuses and throwing money away on ungrateful "children".

I would like to say that I have enjoyed participating in this post (discussion).  Different viewpoints and opinions have been presented and it has stayed very friendly.  Thanks to everyone for that.

I know we are talking about the current economic problems that are facing everyone, but if we can just step back a little I think just about everyone will see that what we are really talking about and discussing is LIFE in general.  Surely we all have stories in our past (those of us that are old enough) where are parents where faced with similiar if not the same or worse problems. 

My parents started out as children of the 'Great Depression' and came out of it as young adults.  My father didn't get a chance to complete school because of the need to help the family with getting a job.  Later on in lfe married and wtih three children my father lost his job of 25 years.  This coming just at the time he decided to take his savings and invest it property in Florida.  This was the early 60's, he had bulit the two homes by himself that his family lived in and was now faced with hard decisions to make.  We moved to a smaller house, he got another job, mother went back to work, and he never lost the property and kept hold of his dreams for his family.  In less then five years, minus to sisters, we moved to Florida.

What's the point here, well life changes everyday for all of us.  Each day we find ourselves making decisions that changed what we planned on doing yesterday with our future.

Starkers, you gave a situation with a young family that I'm sure happens more then we all realize.  I do though have to ask, once the wife lost her job, just what decisions took place?  Did they look at what life had presented to them and make hard decisions?  They could of sold the bigger house and moved to a smaller one.  Did foreclosure really need to happen? 

Do not think by how I respond here that I haven't been faced with hard decisions in my life, we all have.  I think though that the current generaltion of young adults are not equipped emotionally to do what is necessary.  Who is a fault for that, I don't know, maybe Society in general.

There is one thing that I do know, generations before us came through as hard if not harder times.  Did things work out, well, we are all here so I have to think that things worked out.  People will still experience hardships and losses everyday and still manage to make it.  That my friends is LIFE.

Everyone have a great day.

@ jpmurph1. I do not like Bush, either, While I do not live in the US and have never met him in person, every time I saw him on TV the was something about his demeanor, body language, whatever, that never sat right with me, and he decided to invade Iraq all my suspicions/feelings were proven correct. He surely was someone I could never like, trust or respect, and I certainly would never defend him if/when I believed him to be in the wrong. However, dislike him as I do, I have to agree with WOM here, Bush is in no way responsible for the economic woes facing the US and the rest of the World. He may have contributed to them through inaction whenit was required, and he may have contributed by openly supporting a capitalist/open market economy, but he certainly is not 100% responsible for the crash.

There were a number of factors involved, and primarily corporate greed was the driving factor. Bush could and should have stepped in to quash that, but he was not inclined to do so because the corporate world provided him a power base, funds and access to resources: ie, materials to go to war, etc.  That was his failing in this whole sorry mess... failure to reign in the greed when it was within his means to do so.  Blame Bush for that by all means, but he did not set the wheels in motion.  Those were set in motion decades ago and nobody has since bothered to apply the brakes.  Bush inherited those wheels, as has Obama, and they will continue to turn all the while the American people support/tolerate a society that puts profit first, war second and people last every time. 

Hopefully the people will support Obama to apply the brake and turn US society around before it goes the way of the Roman Empire.  Yes, the Roman Empire was Capitalist and Imperialist, and it fell into decay because the upper echelon was too busy looking out for its own interests and neglected those below them... those who built and maintained their infrastruture, those who gathered their food and resources, those who fought their wars, and when you neglect your subordinates long enough they will rebel, refuse to work and allow everything to falls into decay.  That is the fate of the US if it does not adjust its social thinking and put an end to capitalist greed.  It won't happen?  While Al Qaeda remains a threat, there are people who openly advocate revolution to change things, and if enough of them get together, and are pissed off enough, the threat will come from within, just as it did in Rome.  It may not happen right now, but it certainly deserves serious thought.

@ wulfn1: First off I'd like to wish you better luck with your son. Responsibility is a tough lesson at any age and being a parent I am so grateful mine didn't go that route because it certainly could have happened. I'll hold a good thought that his path will be easier in the future. Also, try not to take all the guilt on your shoulders, wulfie (if I may call you that?). He grew up with many sources of input and for the young it's tough...the judgement ceters in the frontal cortex/lobes don't hook up and form the required pathways until age 21-23.

I'm not sure that was the aim of the 'bail out'. I truly believe it was to prevent catastrophe: I don't think we'd be better off had it not been done. In fact, I believe we'd be worse off. I want an accounting. The IRS demands that of all of us, and I demand it of my government.

Bravo!

I too have such hope in my heart for all of us. What an extraordinary man stands at the head of our Government.

I've just read his autobiography and I highly recommend it. Our children and children all over the world (as well as adults) should.

A speech by Sir Winston Churchill comes to mind. It was given at The Harrow School on October 29, 1941 (dark days indeed, dwarfing our own today):

"You cannot tell from appearances how things will go. Sometimes imagination makes things out far worse than they are; yet without imagination not much can be done. Those people who are imaginative see many more dangers than perhaps exist; certainly many more than will happen; but then they must also pray to be given that extra courage to carry this far-reaching imagination. But for everyone, surely, what we have gone through in this period - I am addressing myself to the School - surely from this period of ten months this is the lesson: never give in, never give in, never, never, never, never-in nothing, great or small, large or petty - never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy. "

Take courage. Take faith. Be of strong heart. He who stood by us in darker days and more desperate hours since the beginning of time stands with us now as then.

lol lets see if I do it right this time!!

@wulfn1:

Any lack of accountability will have a detrimental effect. I agree. See my reply this thread #63.

Absolutely agree with you re the future as well. As for the past? I demand full accountability from H. Paulson. Not one iota less. That he was allowed to say he wouldn't reveal where the money went? I would have the FBI pay him a "Blago Visit" at home and frog march him straight to jail.

Betcha he'd answer questions pronto.

Well here is some good news on the economic front, Barack Obama is set to introduce regulations on banks, lending a borrowing, etc.  Hopefully this will restore some stability and confidence in the banking/financial sectors.

However, while the future should be paramount in all our thoughts, particularly in those of governments and the business sector, the past should not be forgotten,,, and certainly not left unattended....

The reason I say it can not be left unattended is that there are monies in the pockets of those who did not come by them honestly or deservingly, and these monies need to be returned to the rightful owners... those who were cheated, conned and left near destitute or worse.  Furthermore, bad pennies have a nasty habit of reappearing, so to prevent these unscrupulous bastards rearing their ugly heads in financial circles a little farther down the track, to wreak more havoc, they need to be rounded up, prosecuted and jailed.  A balaclavaed bank robber is dealt with severely in the judicial system, and so should these so-called bankers and financiers, because what they have done is tantamount to bank robbery. 

They may be/were bank employees, and they may not have performed armed holdups, but customers and investors monies were stolen just the same, and the fact that it came from 'within' makes it even more insidious.  These people are/were in a position of trust, and were given the trust to protect customers' funds, and this makes them worse than the armed robber because they betrayed that trust.

So yes, Doc, drag H. Paulson over the coals and make him divulge where the money went.  I'm not normally a violent man, but I'd haul his arse off to Guantanamo and bitch slap the bastard until he told me what I want/need to know... and all his cohorts, I'm that angered at what they've done..

I'd also outlaw executive bonuses for bankers as well... and make it retrospective because, looking at the state of financial affairs now, those already paid bonuses were neither earned or deserved.  Nor, given their more than generous salaries, were they needed.  No, it was just more of the same, corporate excesses and greed... and that has to stop if this world is to get back on its feet financially.