IMPEACH BUSH
IMPEACH CHENEY
THE RESULTS OF DEREGULATION
Right-wingers tell us that the path to the promised land lies in the "free market." You leave the "market" alone and everything works itself out. The biggest gripes right-wingers have voiced about "big government" deal with taxes paid by the rich and with regulation. The Big Bad Government just stifles business, we're told, with too much regulation. As we see the havoc being created by subprime mortgages, we can see the results of too little regulation. The effects are being felt throughout the United States economy and around the world. This article by Robert Weissman is at www.commondreams.org:
The current crisis is the predictable (and predicted) result of a massive U.S. housing bubble, which itself can be traced in part to global economic imbalances that could have been prevented.
At least five distinct regulatory failures led to the current crisis.
Regulatory Failure Number One: Failure to Manage the U.S. Trade Deficit. The housing bubble (as well as the surge in leveraged buyouts of publicly traded companies (”private equity”)) was fueled by cheap credit — low interest rates. One reason for the cheap credit was an influx of capital into the United States from China. China’s capital surplus was the mirror image of the U.S. trade deficit — U.S. corporations were sending lots of dollars to China in exchange for the cheap stuff sold to U.S. consumers.
Regulatory Failure Number Two: Failure to Intervene to Pop the Housing Bubble. Along with an influx of capital, Federal Reserve policy kept interest rates very low. There were good reasons for the Fed Policy, but that did not mean the Fed was helpless to prevent the housing bubble. As economists Dean Baker and Mark Weisbrot of the Center for Economic and Policy Research
