Comments on: Causes: Econbrowser Speaks

By: Mark A. Sadowski

Mark A. Sadowski — Tue, 13 Jan 2009 03:03:30 +0000

I’ve been spreading the word about Menzier Chinn everywhere. He understands what caused this better than anybody. Yes, oil may have been the straw that broke the camel’s back, but why was the camel’s back ready to break? The real problem was poor regulatory and tax policy. The deduction for second home morgages went into effect in 1997. When did the housing bubble start to inflate? Ahhh, 1997. This is of course not what those spreading the red herrings of the Freddie, Fannie and CRA thesis want to hear. But it sure matches the timeline (unlike the CRA which went into effect in 1977).

By: missmarketcrash

missmarketcrash — Fri, 02 Jan 2009 16:53:50 +0000

Missmarketcrash wonders about causes but is more caught up in the Immediate Now – with much debt needing to exit the system from many different places can anyone shed any further light on that part of the situation? Specifically – see the first paragraph in my blog which is addressed to all the experts as Missmarketcrash is just so very curious…

http://missmarketcrash.blogspot.com/2009/01/tadpoles-frogs-and-libertarians.html

kind regards, missmarketcrash

By: thaddeus

thaddeus — Fri, 02 Jan 2009 14:45:13 +0000

Tom K is right to see all the positives that America will reap from this economic contraction! Truly, it is a Rham Emannuel type opportunity of epic proportions. However, I’m confused as to why President-Elect Obama, who is as insightful as Tom K as to the prospects of this wonderful economic turn of events, is not acting according to his own convictions.

Wasn’t it Mr. Obama who said during the campaign that we all cannot: continue to heat and cool our homes to 72F, drive our gas-guzzling SUV’s and, with only 4% of the world’s population, consume 25% of the world’s natural resources?

Well this recession/depression will certainly help put a quick end to all of those selfish activities! So, why the fiscal stimulus? Why any stimulus from the Obama administration? The faster we get to the bottom of this adjustment, the more quickly the country will be alligned with the goals of people like Tom K and Barack Obama. Doesn’t Barack truly believe in the majesty of his own vision?

The economic contraction will facilitate the fact that we will now all consume less, spend less, drive less, invest less, make less, sell less, buy less, and, because Obama believes we are all obese, perhaps even eat less. What this country needs is a good dose of this economic downturn. Can I have more, please?

By: Tom K

Tom K — Fri, 02 Jan 2009 05:24:46 +0000

I have always felt that subprime mortgages were the primary cause of the financial meltdown. Yet, I think it would be foolish to single out one factor as the overriding decisive factor in bringing about the financial meltdown.

How many people with subprime mortgages fell into default because they simply could not manage the extra burden of paying over $4 for their gas? It is possible that excessive energy costs were the final factor required to push the financial system over the edge.

If the rising cost of energy was a significant factor in creating the financial crisis, we should not overlook the silver lining. Even now that energy prices have declined, few people are ready to go back to the care free days of driving gas guzzlers. We all know that $4/gallon gas is likely right around the corner again once the economy recovers.

It appears this country is solidly headed in a direction of energy conservation and reliance on new alternative forms of energy. Unfortunately, such revolutionary changes seem to only happen when the populace is faced with a severe crisis. It may be difficult to accept at this point, but the financial meltdown may have more positive effects in the long run than bad.