roachboy

just to add, there's Plenty of Blame to go around both of the two right wing parties that control the single party state that is the us of a. two patronage systems within the financial oligarchy.

clinton was the purest monetarist in alot of ways. his administration was a moderate republican period. he kept co-opting the right's message, which made them a little crazy: it was in response to triangulation that the new populist ultra-rightwing media apparatus began to take shape via limbaugh et al. one of their main jobs from the beginning was to impose an entirely fake set of co-ordinates on the political game: so clinton became a leftist. what this concealed was a power-grab within the republican party and the rise of the extreme right. we're all still paying the price for this--witness the thicket of self-serving horseshit about obama-as-leftist that you read here or see in meat-space. it's absurd empirically--but not only do people buy it, those in power use it to legitimate actions---like blocking the extension of unemployment benefits in what could well soon officially be a d-word. or blocking jobs funding then complaining about the lack of new jobs. you know, base stuff.

but yeah, we've had 30 years of unbroken neo-liberal domination in the united states and they've cumulatively brought the place to its knees.
and they will not accept the slightest responsibility.
everything is someone else's fault.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

Baraka_Guru

About Obama-as-leftist:

If Obama were to find his way into Canadian politics, while keeping his politics intact, he'd likely end up in the Conservative party. He'd be a Red Tory, but he would more likely be a part of the Conservative party than he would the Liberal party.

And this isn't because Canada's conservatives are actually liberals. It's because Canada's conservatives are usually either progressive or moderate. It's also because the two parties in the U.S. are generally adverse to crossing over the centre and into the left.

American politics is heavily weighted on the right. It's always amusing to read people talking about "the Left" in the U.S., especially when this is in reference to Democrats. Generally speaking, Democrats aren't all that left. I'd consider most of them centrists or just left of centre. "The Left" in the U.S. is a group that is practically ignored in mainstream media.

If you wonder what I'm talking about, have a look at the social democratic presence in U.S. politics (read: people in public office). Don't feel bad if you can't find anything of substance. The only thing I can think about that would be considered a social democratic effect would be Medicare and Medicaid, and the current push for universal health care.

Other than that, I can't think of anything U.S. politicians do that would be considered well into left politics.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

dogzilla

Here's another example of soaking the rich. A group of people borrowed money thru home equity loans, etc and now don't want to pay it back. It seems like they expect either the government to make good on these loans, sticking it to the taxpayer again, or they expect the rich people and those who have their 401Ks invested in financial stocks to eat the losses.

Anyone who is doing this should have their loan declared exempt from bankruptcy proceedings. If you borrowed money, you get to pay it back. Nobody forced these people to take out loans. Sticking other people with your financial problems is hardly fair.

http://www.nytimes.com/2010/08/12/bu...debt.html?_r=2

filtherton

I think the idea that we just make the majority of these people just pay the loans back is overly simplistic. Even if it were that simple, these banks loaned the money out knowing full well they could lose it via borrower bankruptcy. Just like the borrowers, the banks are responsible for putting themselves in the position that they're in. Furthermore, given an analogous opportunity, the banks would absolutely be using every available legal remedy to maximize their financial benefit. If that is ethical, then so is welching on a lone via bankruptcy.

Baraka_Guru

Yeah, and no one forced the banks to take on the risk of handing out $300,000 worth of credit to a family pulling in $80,000 annually.

It would seem to me, dogzilla, that you have conveniently left out the bank's own responsibility in the matter. Of course, at the time, to them, home equity as collateral was a "sure thing." They didn't expect home values to crap out, so to them the risk wasn't as great as they thought it was.

Real estate is awesome and it's so great being able to repossess it if need be. So hand over $300,000 in credit to an $80,000 family. Make as much money off of them as you can, right? What could go wrong?

It sounds to me like greed is a two-way street.

I will chastise borrowers for borrowing that kind of money for cars and boats while putting their homes on the line. But I don't blame them for not wanting to lose their homes.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

roachboy

that's a kind of ethics-challenged view, there, dogzilla.

but either way, boo hoo. predatory lending practices enabled through deregulation and encouraged as a matter of policy in order to give people whose existences were likely to become precarious a living room to put a tv in so they can watch it and be told what and how to think about things that only made sense assuming all kinds of things that only made sense to assume in the la la land of conservative mythology....now the institutions that profited from those practices and sold the debt, so not only the original predators but others who sought to profit from them via the bundled debt instruments all rated triple a by moodys, your reliable guide to reliable reliability brought to you by the same companies the reliability of which moody's dutifully attests to, they're are all boo hoo because the bottom is falling out of the speculative game they played.

and you are all boo hoo because you see in all this a "soaking of the rich"?

that's hilarious.

they're called write-offs. it's all part of the grand charade. write-offs exist so shareholders can continue to profit in the face of massive losses. which aren't losses any more because POOF they're gone. POOF. bye-bye.

if you read the article that the paragraph you bit comes from, it talks alot about all this writing-off that poor poor financial institutions have had to do. but they were right there selling graduated mortgage products and raking in the cash when the getting was good, right?

cant be an effective parasite if the jobs aint there. and once the bubble in real estate ended the ability of people to borrow based on hypothetical property values ended along with it, the whole fiction came crashing down.

yeah. i think: if there was any sense in the federal government really, they'd declare a universal debt holiday. push reset. you want to free up money for investment? vaporize private debt as a political action to restart the economy. think of it as a break for everybody. the only obstacle really is the profit-taking motivations of the financial oligarchy. but maybe it's time to break them. no...its definitely time to break them.

but i digress.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

dogzilla

I used this mortgage calculator Mortgage Calculator and calculated a 30 year mortgage for $300,000 at 6% interest and property tax of around $6,000/year which is in the range of property taxes where I live. Add in $500/year for home insurance and it's about $2500 per month payment. For someone making $80K that 38% of gross income. The recommendation is these payments shouldn't be more than 28% of gross income so 38% is a little high. If there was a down payment of $50K then the monthly payment is around $2100/month or 31% of gross pay. A bit of a stretch, but could be justifiable.

So I don't see the bank taking an unreasonable risk here. I also don't see any justification for the borrower walking away form the mortgage because his equity disappeared. I've never heard of any kind of guarantee that property values would not decrease. So now the taxpayer or the shareholders get to make up the loss.

I bought my home in 1985 with a 12% adjustable rate mortgage. That mortgage was paid in full by 1993. Since then every offer for home equity loans, etc has gone in the trash. My wife and I refused to put our home at risk to finance toys or vacations.

Maybe I should have taken the long term liberal view, maxed out my credit and let Obama foot the bill

filtherton

It doesn't matter whether the risk was unreasonable or not. They took it and it's blowing up in their face.

Actually, I think you'll find that it's the view of a fair amount of conservatives, provided one replaces the homeowners in this scenario with private businesses. It's a fairly common business practice to declare bankruptcy when it makes financial sense to. One might even argue that that's what bankruptcy is for, whether it's Joe down the street or Enron or Lehman Bros.

dogzilla

The person who took out the loan also accepted the risk and had it blow up in his face. To skip out on a loan because the value of your purchase is less than the loan balance is immoral. To expect others like the taxpayers or investors to eat the loss for this reason is immoral.

If this sort of thing was acceptable, then why doesn't everybody do it for new car purchases? The line I hear frequently is that a new car's value drops significantly when you drive it off the lot. So the new car owner is already in the red from day 1.

The person who takes out a loan is responsible for repaying the loan. I was raised to honor my commitments. I guess times have changed. Free houses for everyone. Thanks Obama.

roachboy

right, so the only real argument you have is that you don't like barack obama. the correlate of that is basically that you impute everything else you do not like to his administration--or person for all i know---and that no facts or history or anything else are going to get in your way. so there's no real difference between what you post and the voice in your head that repeats how much you don't like barack obama.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

Tully Mars

Yep, you're absolutely right Obama is giving away houses for free! Free for everyone, well everyone except hard working "real Americans," right? He's just giving them to the freeloaders. So hard working "real Americans" who are paying for these free houses can't get one. From what I saw on the news yesterday I think the line for those give aways starts in Atlanta.

You make silly, false statements like that and you want people to take you seriously... seriously?

Yeah, I think I'll file that statement in the same file I put "Bush blew up the towers on 9-11." It's a growing file in the back of my mind labeled "complete horse shit."

As for the comments you made regarding people borrowing money they could never repay I partially agree with you. But you're leaving out the other side of the problem. Takes two to tango. Banks and mortgage companies were writing loans with no income verification, no down payment, 120% loan to value ratio etc... to people with ridiculous credit scores. Often times mortgage brokers convinced, with a hard sell, people that they could afford loans that were way beyond their means. Many times these loans were written in such a way it would take an expert to read through the 80 pages of loan documents to find the relevant terms.

My daughter had a co-worker who took out a loan to buy her first house. No down payment, low interest and low payments. Really it sounded to good to be true... and it was. After three years her interest rate went up so much her payment nearly doubled. She asked if I would look at the contract and see if that was even legal. Yep buried somewhere near page 50 was a small one line statement that the "initial interest rate will expire on after the 37th month and the standard loan rate would be applied." Later on about page 55 the standard loan rate was defined as "Prime +4 or 5% (can't remember exactly.) So she went from having a payment she could afford to one that was more then she made each month. So even if she didn't buy anything, no food, no gas, no utilities etc... she couldn't make the payments. She was lucky this happen when the housing prices were still going up and she managed to find another loan through a local credit union that was manageable. But had that happened after the collapse of housing prices I have little doubt the CU, or anyone else, would not have written her an new loan.

People who used their homes as cash machine should have known better. But there's a lot of people out there willing to fall for some really stupid stuff. If it sounds to good to be true it likely is, most people should have learned that before puberty

__________________
I used to drink to drown my sorrows, but the damned things have learned how to swim- Frida Kahlo

Vice President Starkizzer Fan Club

dogzilla

No, what I don't like is the assumption that if the lower income people want something or need something that the more wealthy people will pay for it. If people claim they can't make their mortgage payments, Obama expects the banks to eat the loss or get the taxpayers to fund it. If Obama doesn't like the way GM and Chrysler do business he nationalizes them and expects the taxpayers to bail them out. Obama is forcing people to buy medical insurance. If they claim they can't make the payments then he's going to make the taxpayer pay for it. With my overall tax burden such that my salary until mid-May pays taxes, I've had enough.

I also don't like Obama's willingness to forgive lawbreakers with his openness to amnesty for illegal immigrants. They don't all have to be sent home this year, but the sooner we start, the sooner they will be all gone.

Again, I was brought up to make do with what I have. If that meant living with roommates because I couldn't afford to live on my own, then I found roommates. If I couldn't afford to go to upscale restaurants every weekend, then I stated home and ate home cooked food. If I can't afford to go to the movies, I stay home and rent netflix. I don't expect taxpayers to save me.

filtherton

I don't know why you're so obsessed with Obama. He didn't set up the current bankruptcy system. You're beginning to sound a bit nuts here. I don't like Obama either, but at least I recognize that he isn't responsible for everything that I don't like about the current state of the economy.

Tully Mars

It's somewhat amusing watching the two sides of the same coin trying to face and scream at each other. "Bush is the devil and everything he does is evil!" "No Obama is socialist demon pig from hell and he's ruining the country!"

Blah, it's likely to late too do anything but watch as the country slips farther and farther down the rabbit hole. Certainly not much coming out of Washington is actually going to help. And the way they do things, have been doing for decades, is really insane.

__________________
I used to drink to drown my sorrows, but the damned things have learned how to swim- Frida Kahlo

Vice President Starkizzer Fan Club

roachboy

for what it's worth, my basic position is as i've said--that the united states has suffered under 30 years of unbroken domination by an oligarchy that's comprised to two factions which represent different corporate sectors and which express slightly differing tactical views----but within the same basic neoliberal ideological framework.

i found george w bush to be profoundly distasteful---illegitimate wars, governing from a state of emergency, the pathological extension of the security state---and singularly inept in terms of economic policy---but the people who crafted those policies were often the same as who crafted most of the other major neoliberal initiatives that served the united states o so ambiguously.

neoliberalism is a retro-expression within the larger context of shifts in the way capitalism had been organized put into motion by the nixon administration. while it's not a lock-step thing by any means, structurally speaking we are almost 40 years into a post-fordist regime and haven't come up with a politically viable way to balance the effects of the geographical scattering of production against the requirements of a humane/functional modern society. debt bubbles haven't worked out so well. neither did stock bubbles. sooner or later there has to be an actual rethink of policy. i don't think obama is going to do it---too moderate. the right has absolutely nothing to offer. so we're adrift it looks like.

too bad this isn't a movie or we'd cut away until the next interesting plot bits start to turn up.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

Baraka_Guru

About Obama being too moderate:

It would seem that he will only be capable of trying to hold everything together as it slowly but surely disintegrates, but a part of me thinks he's only delaying the inevitable.

It doesn't take a reach to see how things could very well take a turn for the worse (even worse than 2008). And I fear that if it does, this will set the stage for a post-Obama populist reactionary, whether from the left or the right. However, even a slight understanding of the American political landscape would suggest that it would most likely come from the right.

Maybe the Tea Party is just a precursor.

Soak the rich? How about eat the rich?

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

Cimarron29414

rb-

I see what you are saying, but I don't understand how giving these people (the government) even more money, power, and control fixes it? Perhaps that is rhetorical.

__________________
Gives a man a halo, does mead.

"Here lies The_Jazz: Killed by an ambitious, sparkly, pink butterfly."

Tully Mars

I don't think giving them more money is the answer either. I do think we need to turn the ship before hit the ice berg. The amount we spend on the military is simply obscene.

I found this article interesting Link

__________________
I used to drink to drown my sorrows, but the damned things have learned how to swim- Frida Kahlo

Vice President Starkizzer Fan Club

aceventura3

One in seven were in poverty in 2009 according to the Census Bureau. Poverty is up, income is down, even the number of people with health insurance is down under Obama's leadership - but if you look at some other economic indicators, the "rich" are getting richer widening the gap between the haves and have nots.


Read more: Recession grinds 1 in 7 into poverty - CharlotteObserver.com

I have a theory.

Perhaps the "rich" have gotten together to conspire to increase the poverty rate and get richer so that Obama fails since they really, really, really, don't like him. What do you think?

Or,

Perhaps, Obama's economic strategy is failing, that his attacks on the very people who drive economic growth has been the absolute wrong thing to do, and the threat of increased taxes, increased health care costs, increased regulation has put the brakes on wealth flowing from the "rich" to the rest of us.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

roachboy

or

you still cannot accept the reality of the situation. the obama administration did not cause the current economic problems. neo-liberal policy caused it. at some levels, it's a function of the entire movement of capitalist organization since the 1970s, a reconfiguration of economic geography that in the end amounts to an exporting of exploitation to spaces with no unions, repressive labor laws and lax environmental regulation--you know, the kind of spaces that conservatives want to create in the states because god knows everyone wants to be in a third world country and if conservatives in the united states can help us all achieve our american dream of living in a planetary guatemala, why who are we to complain?----some more short term, like the derivatives fiasco that was enabled by the lunatic assumptions of alan greenspan, which (again) lean on free-marketeer assumptions that (as always) turned out to be utterly, disastrously wrong.

so you've got a heap of ash in your hands when you talk economic ideology, ace dear, but you cannot face it. so conservatives try to act as though reality is contained inside an etch-a-sketch and if you just shake it real hard the past just goes away kinda like that strange picture of an dinosaur does. from there, it follows you can blame the obama administration for a fiasco that people like you caused and even more absurd you can act as though exactly the economic worldview that got us into this pile of shit in the first place can somehow get us out.

it's funny. and it's only worth commenting on because it's friday afternoon and i'm treading water before heading out into the grey afternoon. because it's also utterly, completely banal what you're saying.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

aceventura3

True, I cannot accept that....because....it is wrong!

This recession would have been a much more normal recession if not for government interference.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

roachboy

right ace. i'll let you have at your private world, then. enjoy yourself.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

Derwood

You have no data to back up that assertion

__________________
"You can't shoot a country until it becomes a democracy." - Willravel

Baraka_Guru

How do you explain Canada?

Or do you consider what we do "regulation" instead of "interference"?

I suppose it could be luck as well.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

aceventura3

Hey Roach, who does this sound like?

A neo-liberal threw a pebble in a pond in 1970...and...and...that's why unemployment is 9.6% today.

---------- Post added at 11:27 PM ---------- Previous post was at 11:25 PM ----------

As the US goes, so goes Canada. Pretty soon we will substitute US with China. I doubt Canada will ever lead, do you think it will or does?

---------- Post added at 11:35 PM ---------- Previous post was at 11:27 PM ----------

There is evidence all over the place, including the obvious trends of poverty, unemployment, foreclosures, personal bankruptcies, uninsured, corporate profits, lack of capital investment, etc., you simply won't accept it. Here are a few examples of what the evidence connects to:


I was against the corporate bailouts. And it is in part, those bailouts that have lead to increased corporate profits during this recession.

Zero, risk free cost of capital paid for by you and me, now leading to increased merger and acquisition activity.

I was against "financial reform" and it was those very reforms that allowed or forced banks to strengthen their balance sheets, increase foreclosures, reduce credit availability, increase fees and borrow for their own accounts at zero cost on the backs of the American public.

I was against health care reform that is increasing premiums, reducing coverages, hurting employment and increasing the uninsured and that will potentially bankrupt this country.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Baraka_Guru

Lead what?

Lead the GDP growth amongst the G7 in 2010? We might. It's looking to be the case.

Become a leader in financial services? There's lots of potential there. Toronto is poised to take a lot of the spotlight, especially considering the robustness of the banks and the financial industry even during the global recession.

Lead the way in terms of being one of the best places to live in the world? A few of our major cities often rank highly (especially Vancouver). But it's difficult to compete with a lot of the European cities who often top the charts.

But let's stay on topic: you were implying that government "interference" got in the way of the recession. Canada's own government (a minority conservative government) issued a 2-year stimulus package worth about $35 billion—as a benchmark, our 2009 GDP was approximately $1.3 trillion. While the U.S. package is now estimated at $862 billion, the U.S. 2009 GDP was $14.3 trillion.

So you have stimulus spending in both economies. But you will note that the U.S. package was 25 times larger than the Canadian one, yet the GDP of the U.S. was only 11 times larger. To say there is a big difference would be a fair judgement. However, there are different factors to consider: we didn't have a mortgage meltdown, our banks didn't start evaporating en masse, and our economy is a bit different in terms of the distribution of regulatory practices and government ownership.

There are several factors actually. And this is what I'm getting at. The stability of the Canadian economy is due in part to our more balanced mix of free market economy and government regulation, ownership, and monetary/fiscal policy that is more Keynesian than it is monetarist or supply-side.

That's it in an nutshell. Our recession was less severe and shorter than everyone else in the G7, and it wasn't a fluke. It was a result of a balanced, reasonable, and rational approach to governing our economic system.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

aceventura3

In part you argue in support of my point, if you are saying Canada's government did less to micromanage its economic slow down compared to the US and Canada's economic slow down was less severe. I am not arguing that given current conditions, government spending and deficits in the US, that the US will be a world leading economy in the future. Given Canada's mortgage market, Canada exercised greater discipline than the US. However, most US banks remained healthy during the "melt down" and would have done o.k., government action made matters worse and spread the problem of excessive risk from unhealthy institutions to healthy ones, and the government allowed situations like Goldman Sachs to get paid 100% on the dollar making record profits from the bailout of AIG on the back of the tax payer.

Let's slow down a moment.

Canada's primary industries are in minerals, natural gas, oil, and other natural resources. During the global slow down, many of Canada's major industries where getting historically high prices for commodities. During the past 10 years Canada's economy has grew, but with an increased dependence on China's economic growth.

I think the above may be a bigger factor than anything else for Canada.

I hope Canada manages the current opportunity as you describe. Given the resources in Canada, the country can move up the ladder of world economic rankings, not that the current rank is bad, I believe it in the top 10 currently.

---------- Post added at 04:42 PM ---------- Previous post was at 04:31 PM ----------

I do enjoy the folly in flawed ideology. I came across this in today's IBD and I thought of you because I imagined how you have or would.

The Supply-Side Lesson Of Henry Ford - IBD - Investors.com

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Baraka_Guru

My ultimate point is that Canada's financial sector is far more regulated than the U.S. sector (though I think that's changing on the part of the U.S.), and that was what added the stability. Who's to say what would have happened to U.S. banking had the government not stepped in. Either way, it would have been disastrous, if you ask me.

You've misjudged and possibly underestimated our economy. Less than 10% of our GDP is derived from natural resources, and only 30% of our GDP is based on exporting. Keep in mind that over 70% of our exports go to the U.S.

Throughout the 19th and much of the 20th century, we were famous for being "hewers of timber and drawers of water," but the shift to an information economy has made that vision of us rather obsolete. Canada's economy is far more diversified that you make it out to be.

I've hinted here and elsewhere that Canada's financial sector is poised to take much of the spotlight. Our overall services sector is sitting at around 70% of the economy, and the lion's share is in the financial sector. Over 20% of our GDP is derived from financial services. Just to give you an idea, four Canadian banks are amongst the top 10 banks in North America.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

aceventura3

Here is a link to a website with some comparative data between Canadian and US banking:

Commercial Banking in the U.S. versus Canada - Graziadio Business Report

One key factor is that Canadian banks are much more centralized. Canada has 70 banks compared to 8,500 in the US and the top 6 banks in Canada hold 89% of the banking assets compared to 51% in the US. One of the problem areas leading to subprime lending problems in the US was the CRA (Communities Reinvestment Act which forces bank lending activity in low income areas. Also, in the US there has been a blind focus on home ownership as the American dream with government policy and actions that lead to irresponsible home ownership. Also, in the US for example during the 90's our Fed Chair Greenspan was given the authority to examine bank lending practices and use his regulatory authority to fix problems but he did not. The SEC had the regulatory authority to investigate and modify the practices of investment banks, but they did not. so, it may be true that Canadian banks were subject to greater regulation, the reason may not be because of more regulation but due to regulations actually being enforced. And then the cultural differences between the countries regarding lending practices to risky debtors.

---------- Post added at 08:42 PM ---------- Previous post was at 08:24 PM ----------

This may be true, I'll look into it some more. But, to me on the surface a country being a net exporter of "energy" related resources compared to a country that is a net importer of "energy" related resources has a measurable advantage when the prices of those "energy" resources are high and other resources and economic activities are in a pricing slump due to negative or slow economic growth. That is the exact condition where a country like Canada would do better than the US in relative terms during a recession. On the margins that small percentage of total GDP that is "energy" can have a disproportionate impact on economic conditions.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Baraka_Guru

As far as the banking industries, that's a fair comparison, but there are other factors the information above doesn't cover. For example, we didn't have a mortgage crisis like the U.S. did. Much of that has to do with regulations barring banks from taking on certain borrowing risks. More specifically, there is a minimum requirement for a down payment on a home, and below a certain threshold, the borrower must take on mortgage insurance.

And this ties into my original reaction to your comment about "government interference." I'm not currently sure if you were referring to the task-based measures taken in the U.S. banking industry or if you were referring to government measures in general. But, as I've pointed out, and regardless of the distribution of assets throughout the industry, reasonable regulatory practices ensure that banks aren't taking on foolish risks when doling out credit to borrowers. That's the deal with the Canadian system: reasonable regulation. The U.S. system seemed way too lax. You said the SEC had the authority to do something but didn't. Perhaps the problem is that they had options and not rules.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

aceventura3

There are two primary components to government interference regarding the financial crisis in the US. One the government actively participated in social engineering by adopting policy that subsidized home ownership and hiding the risks. Fannie Mae, FHA, CRA, mortgage interest rate tax deductions, etc., helped create the housing bubble and encouraged greater and greater risk.

Two, government responded to the "financial crisis" in a irresponsible manner that did more harm by causing panic and over-reaction than good.

Imagine - I am the government and I want to avert a financial crisis - so, I take a piece of paper and write "one trillion dollars" on the note, and put it in my left pocket. Then I move the note to my right pocket - and proudly announce I saved the world. Understand, the US borrowed bailout money, money they did not have, and give it to some banks that did not need it, to protect a few that did - and called it something good. Not to mention that the bailout amount was but a trivial percentage of the financial sector - yet so many buy into the b.s.

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"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Baraka_Guru

So are you saying the problem is with how they did it, not that they did it at all?

My basic criticism is that the measures people tend to complain about are emergency measures, not common practices. The system in the U.S. should be overhauled to ensure the same kind of foolishness doesn't happen again. I'm not about to disparage a government's knee-jerk reactions when the blame is instead on the overall governance of the industry.

By the time the Obama administration did something, it was already too late. It's like applying CPR when instead you're going to need a triple-bypass or, worse, a transplant.

Don't blame the person giving CPR if it isn't enough and the patient's condition worsens. Look forward to the surgery.

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Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot