Quote:
Originally Posted by BDF
That's where I think the roots of the problem with the current recession stem from. At some point in the US a decade or two ago, or maybe even three decades ago, banks were almost entirely deregulated. Whether this was done as a result of a bribe, negligence, connections or ass kissing is unclear. It was almost certainly done for money, as it allowed the banking industry a lot more freedom than was reasonable. Now you regularly hear of some unknown individual with billions upon billions of £ or $. Where did they come from? They're not taking risks with their own money, but other people's money, and if they fuck up they're either insured against small losses, or go bankrupt and get governments to bail them out at the public's expense. They can't loose in a position like that.
Then the disease spread to other countries, naturally, because the USA had the largest economy in the world with which almost every other was connected.
An example of what "too much power" in the wrong hands can escalate to. Personally I think the specific individuals responsible for deregulating the banks should be fucking shot in the kneecaps and left to bleed to death.
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U.S. Banks lately are firing thousands of people in fear of penalties from strict and complicated government regulation. But hey, at least people are being saved from themselves and from accepting mortgage terms they can't afford...
Its not as simple as the typical liberal talking point "more regulations" but the type of system. A survey conducted by the World Economic Forum, concluded that Canada has the best banking system in the world, receiving a score of 6.8 out of possible 7. We have a simplified regulatory system.
We have no Fannie Mae and Freddie Mac promoting "affordable housing" through guarantees or purchases of high-risk loans. The banks own the mortgages instead of selling them off. Mortgage interest is not tax deductible. its harder to qualify for a mortgage, and if a down payment is less than 20% of the value of a home, the mortgage holder must purchase mortgage insurance. So you can't have an idiot buy with a 3% down payment freely like you can in the US. Plus in the US you can walk away from a mortgage...in Canada you are responsible under all circumstances. And yet it's not any more regulated than the US, or more government involvement - it's just a streamlined system with less legislation tying the hands of lenders and more responsibility on the buyers. Efficiency ftw. /end rant
Monopolies and shitty business tactics are another story though...but that's been going on since Tesla and Edison, Beta and VHS, Apple and Microsoft. The world is forced fed a vastly inferior #2 product by muscling the #1 guy out and taking him to court in almost every fucking state in America (in apple and samsungs case, almost every county). I don't know what solves it, but it's a flaw in the free market that's for sure...