Comments on: Backpedaling to nowhere: In 2007, Bernanke said ‘regulatory changes’ were to blame for subprime crisis http://minnesotaindependent.com/10704/backpedaling-to-nowhere-in-2007-bernanke-said-regulatory-changes-were-to-blame-for-subprime-crisis News. Politics. Media. Wed, 30 Nov 2011 23:48:28 +0000 hourly 1 http://wordpress.org/?v=3.1 By: jonerik http://minnesotaindependent.com/10704/backpedaling-to-nowhere-in-2007-bernanke-said-regulatory-changes-were-to-blame-for-subprime-crisis/comment-page-1#comment-12929 jonerik Sat, 27 Sep 2008 00:53:46 +0000 http://minnesotaindependent.com/?p=10704#comment-12929 Q: "Why did it take so long for Bernanke and Paulson to enact any sort of regulation given that they knew what was coming?" One reason Paulsen and Bernanke might not have clamped down some sort of regulations sooner is that they regulate only part of the financial securities market. The SEC regulates part but so does the Commodity Futures Trading Commission. And then there are the "hedge funds" which are not regulated at all. If the Treasury or Federal Reserve was to take some sort of action taken by the "market" which players already think is a free market, it sends a negative signal that might result in the very thing bank regulations at least are designed to prevent: a panic. John Kenneth Galbraith, in his classic "Money: Whence it Comes, Where It Goes" said that when one member of the Federal Reserve suggested that the Fed. clamp down on the use of borrowed funds on margin to curb speculation, he was widely lambasted for trying to create a panic. So that's the problem with this free market crap. It isn't true but people want to believe it. When you give it to them straight, and they find out what it's really like and it frightens and ruins them they say, "Take it away, take it away." But by then it's too late. Q: "And if they wanted to wait to create such a “thoughtful” resolution to the crisis, why are they moving so quickly to get a bailout passed that has little regulation and a handout to the investors who helped create the mess in the first place?" A: It's not a thoughtful resolution to the crisis. In fact, there may not even be a "crisis" except one they made up. It also may be that if there is a crisis, they have no clue as to what to do. Paul Krugman has wondered why Paulsen and Bernanke are treating the "crisis" as one of liquidity which oine would expect in a banking crisi where there were runs of the bank. But that's not happening. Their resolution it gives an appearance that they know what they are doing so it buoys up "confidence". And possibly, no probably, because they are owned by powerful and welathy people who want to cash out before the "deluge", they are raiding the Treasury to pay off their owners. "And one more thing: Should Paulson and Bernanke still have jobs?" That's irrelevant. They are only doing what their boss, the President of the US, George W. Bush wants and are acting to save his sorry ass. Bush should have been impeached long ago. Throw him out and you throw these clowns out too. Q: “Why did it take so long for Bernanke and Paulson to enact any sort of regulation given that they knew what was coming?”

One reason Paulsen and Bernanke might not have clamped down some sort of regulations sooner is that they regulate only part of the financial securities market. The SEC regulates part but so does the Commodity Futures Trading Commission. And then there are the “hedge funds” which are not regulated at all. If the Treasury or Federal Reserve was to take some sort of action taken by the “market” which players already think is a free market, it sends a negative signal that might result in the very thing bank regulations at least are designed to prevent: a panic.

John Kenneth Galbraith, in his classic “Money: Whence it Comes, Where It Goes” said that when one member of the Federal Reserve suggested that the Fed. clamp down on the use of borrowed funds on margin to curb speculation, he was widely lambasted for trying to create a panic.

So that’s the problem with this free market crap. It isn’t true but people want to believe it. When you give it to them straight, and they find out what it’s really like and it frightens and ruins them they say, “Take it away, take it away.” But by then it’s too late.

Q: “And if they wanted to wait to create such a “thoughtful” resolution to the crisis, why are they moving so quickly to get a bailout passed that has little regulation and a handout to the investors who helped create the mess in the first place?”

A: It’s not a thoughtful resolution to the crisis. In fact, there may not even be a “crisis” except one they made up. It also may be that if there is a crisis, they have no clue as to what to do. Paul Krugman has wondered why Paulsen and Bernanke are treating the “crisis” as one of liquidity which oine would expect in a banking crisi where there were runs of the bank. But that’s not happening. Their resolution it gives an appearance that they know what they are doing so it buoys up “confidence”. And possibly, no probably, because they are owned by powerful and welathy people who want to cash out before the “deluge”, they are raiding the Treasury to pay off their owners.

“And one more thing: Should Paulson and Bernanke still have jobs?”

That’s irrelevant. They are only doing what their boss, the President of the US, George W. Bush wants and are acting to save his sorry ass. Bush should have been impeached long ago. Throw him out and you throw these clowns out too.

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