re: #217 lawhawk

There were some Congressional and Presidential actions that contributed to the problems too - both from the lack of Congressional oversight and from demanding that banks lend to those who were incapable of repaying such that the moment that the real estate markets began a correction, these people would start defaulting and the values of the properties would grow in uncertainty when the banks tried to calculate values (mark to market). The banks weren’t blameless, but to stop the analysis there is seriously incomplete.

Banks were loaning money to people who couldn’t pay it back, and not just because Congress forced them to. They had developed a system of raking in short-term profit based on it, and it worked fine for a a decade or so.

The analogy I like to present is that of a traffic light at busy intersections: one can see it as “government interference in freedom of movement”, but it can also be seen as a way of making the intersections work for everyone, not just those with the biggest SUV’s.

So we took down the traffic lights, and when we hit gridlock, Obama has to come out and be the Traffic cop (a much more costly and inefficient solution) to get things moving again.