Americans like Romans

[Super Nova]

II was not a proponent of the banking deregulation Clinton rammed through Congress.

But if buyouts are necessary to keep millions loosing their homes, then so be it.

I do believe such buyouts should then be accompanied buy a demand that it gives the government a right to more carefully control lending practices.

Still, David Brooks wrote a wonderful article that reveals there is more going on here than just deregulation. The two major banks that failed, Fanny Mae and Freddy Mac were highly regulated.

There is a convergence of global forces at work here, the huge influx of foreign capital that flowed into the US since the 90s, increasing the ability to lend. The huge rise in global wealth (and increasing money supply with the rise of South East Asia and China.

And he warns that regulatory prescriptions in of them selves will not entirely solve what is a birthing pang of global evolution, the creation of the first real global economy. Nor would it always be fair. For instance Fanny Mae and Freddy Mac vastly expanded home ownership to the poor and working class by lowering the lending requirements. Most will survive these crises and keep their homes. Tighter regulatory practice such as was enforced in the 60s and 70s would have never seen them own a home.

Yet the great expansion of credit and allowing people at the lower ends of the economic spectrum to buy homes certainly was inflationary and created a housing bubble.

So the issue is far more complex than just typical right free market vs. left regulatory economics.

None of this however speaks much to the US’s ability to remain a world power, it is a credit crises, one that will be resolved by pain or gain, but resolved it will be, but GDP is still adequate, even right now, to continue the pax Americana for some time.

That is the most coherent post I can remember from Frogen. It must have been a day his member was not too swollen and not top of mind.

[Jasin]