Reagan-Bush policies on the economy have reduced the purchasing capacity of the average American, who at the same time was encouraged to purchase a home. With dwindling purchasing power and skyrocketing housing prices, many citizens expected that only a home purchase could secure their economic future.

The fundamental issue that caused the crisis, however, was not the issuance of these loans per se, but the fact that the risks involved were not disclosed to the ultimate holders of the mortgages. This is a failure to regulate. Compounding the problem was a Fed that continued to reduce interest rates in an effort to prevent a housing price collapse, ignoring the obvious folly of such a plan – rates can only be reduced for a finite period of time.

An economic policy of massive federal debt, coupled with the collapse of the middle class under Reaganomics, is the ultimate underpinning. A failure to regulate financial institutions allowed the problem to grow to a point where the current collapse was unavoidable.

DS

Let’s look a bit more closely at the scandulous ‘business’ of Bernie Madoff, confidence games, Ponzi schemes and other financial vehicles for funneling, accumulating and concentrating billions of dollars in unearned wealth into the hands of a tiny minority of people who comprise the top of the global economy.

There are many minions of the wealthy and their bought-and-paid-for politicians who “spread the word” of these schemes. Con men operate pyramid schemes. They assure “plausible deniability” and “legal cover” for all that is said and done.

Only a telling of the truth about what they are doing is forbidden. That is the one and only thing that is verboten. Do not break their vow of silence by telling what is true about the perpetration of the schemes {ie, the only games in town, so they say}, because the “houses of cards” out of which a modern Tower of Babel is constructed immediately is exposed as fraudulent and patently unsustainable. These pyramidal constructions can withstand any force except that which is presented by speaking out loudly and clearly about what is happening in these enterprises. As soon as light of what is true was shed on Bernie’s scheme, the house of cards he had constructed fell.

Bernard Madoff may be the first of my “Not So GREAT GREED GRAB Generation’s” kingpins to find that his “house of cards” has collapsed; but I dare say, Bernie will not be the last. There are other kingpins and many too many minions ready, willing and able to play along in what looks like the greatest self-enrichment scam in human history.

Why not say that greed is not good and mean it? Why not assign value to personal honesty, accountability and transparency?

Steven Earl Salmony
AWAREness Campaign on The Human Population,
established 2001
http://sustainabilityscience.org/content.html?contentid=1176

Economics, it seems to me, is all about character. It should be studied and taught as a branch of psychology.

It was not political either.

LOW LOW interest rates [which by the way should be illegal. Interest rates should float and not be manipulated by the gov] and securitization of loans from banks and mortgage brokers to wall st. caused these problems.

Bubbles happen. 90’s internet companies are an example.

People smell money and when money is CHEAP(interest rates) people then begin to gamble. Great depression was partly due to people wagering leverage.