The same thing that motivates mergers: corporations get economies of scale by eliminating positions in the acquired company. No need for two of everything if you've got one company. The reverse is also true: Split a company up and its managers can't work for more than one of the resulting companies.

That's just the most obviouse place. There are many more areas that need more regulation. Truth in advertising for example!
Never said I didn't think both parties are too friendly to Big Business.
What statement is absolutely true? That one's plenty true enough.

Sure, but you can't stabilize a patient while they're still being attacked. Unregulated Big Business isn't the broken bone. It's the thug who is breaking bones!

That's a fair observation. Keep in mind that smaller companies will need fewer layers of management, though.

Agreed, that is not the only place in which regulation is needed.

Sometimes it's true; sometimes it's not true. Treating it as though it is always true doesn't help people.

No, it is the break in the bone. If we want the patient to survive long enough to be able to repair the bone, the bleeding must first be stopped.

The bleeding is a symptom, but it is a symptom that poses a greater immediate threat than the underlying problem, and thus, should be addressed first.

I agree that we need to look toward the future and take steps to prevent this from reoccurring. Where I disagree is that I don't believe we can neglect the present as we do so. We can't shut down the economy in order to redesign it. We have to deal with problems with the economy in its present state, and make improvements where we can as we go along.

Bones don't keep breaking by themselves. Big Business has been sending good jobs to cheap labor markets where it can pollute and ignore human rights for a couple of decades now, and the bleeding finally got to be too much to handle. They haven't stopped doing that because of this crisis. They've accelerated the practice, which is why we have many more people who can't pay their mortgages.

That isn't a primary cause of the current financial crisis.

Really? It seems obvious to me that if jobs disappear slowly over time, and the losses accelerate over the last decade, people will do whatever they can to maintain their standard of living, even if only for the short term. This will naturally make it easy for predatory lenders to make unethical/illegal loans. The rest is just details: Credit Default Swap, Mortgage Backed Securities, No Doc loans, etc. are all just the means by which banks did bad things, and not a cause of the overall problem any more than a gun is a cause of a crime.

The jobs going overseas are just more of those "details," not the underlying problem.

I don't know how you can think that. Movement of jobs is always a fundamental issue. Moving them to give a corporation the ability to cut costs by breaking laws is even more serious.

Because I've done a fair amount of research on the crisis. Sending jobs overseas didn't help matters, but it wasn't a primary factor. Some of those "details" you mentioned played much larger roles.

But those details wouldn't come about if not for shipping jobs! If jobs hadn't been shipped out, wages would have kept up with inflation. That would mean far fewer people who couldn't afford homes, and therefore far fewer bad loans! Far fewer bad loans means far less trouble for banks. As always, everything rests on jobs.

Wholly incorrect.

You're significantly underestimating the full effect CDS's and MBS's had on the housing bubble and collapse.

Agreed.

Incorrect.

And your evidence is?

No, I'm saying that it was the loss of jobs that affected them. People couldn't afford to buy houses, but banks wanted to make loans so they made risky loans. If those people had better paying jobs, the banks could have made the same loans without the high risks.
If you agree with that, then how can you not see that a loss of jobs means that in order to make the amount of loans the banks wanted, they had to take higher risks?

:eek:
Our entire economy rests on the backs of workers! Do you think that some CEO is going to spend thousands of times more money on goods and services just because he is paid thousands of times more? :rolleyes:

While I agree that economies depend on workers with jobs that afford them the means to join the ranks of consumers (Ford's basic idea that a worker should be able to afford a car), I disagree that "our economy rests on the backs of workers" as I think you mean the term "workers", because that assumes that the US economy is based on manufacturing, and I don't think that's true any more.

Sorry, but I don't think that sales people, teachers, firefighters, carpenters, waitresses, cabbies, etc., are less "workers" than factory workers.

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I don’t think of workers as exclusively, or even primarily, connected with manufacturers.
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Because loss of jobs was not the reason for the lowered standards for mortgages. The demand for mortgage backed securities is what drove those standards down, since mortgage backed securities could not be sold without the underlying mortgages.

Banks made the risky loans because they were not keeping the mortgages, they were selling them to other financial institutions. This is supported by the fact that banks that were less likely to sell their mortgages saw lower foreclosure rates than banks that did sell them. That would not have been true had shipping jobs overseas been the primary cause of the foreclosures.

The high risk loans were made in an effort to satisfy demand for mortgage backed securities. Even people with good jobs were taking out high risk loans, because they could get them. Decreasing income isn't why most people affected were no longer able to pay their mortgages. Increasing mortgage payments on adjustable rate mortgages was a more common reason.

Traditionally, the mortgage industry has had had a built in safeguard against such things happening. Banks wouldn't approve mortgage applications from unqualified buyers. That built in safeguard disappeared. Unfortunately, people still assumed, albeit incorrectly, that they could afford the loans they were getting, because, if they couldn't, the bank wouldn't approve them. Thus, people were able to apply for and receive mortgages that they couldn't afford.

Because, even without the loss of jobs, the banks would have had to offer the high risk loans to satisfy the increasing demand for mortgage backed securities. Housing prices were increasing. Without correspondingly increasing incomes, the portion of Americans who could afford to buy a home decreased. There didn't need to be an increase in unemployment to make the higher risk mortgages necessary in order to keep up with the demand for MBS's.

It's naïve to believe that shipping jobs overseas was a major contributing factor to the bursting housing bubble. The evidence suggests otherwise. To be clear, I'm not supporting the practice of shipping jobs overseas. But, it would be disingenuous of me to use my loathing of that practice as an excuse to assign to it blame for the current financial crisis.

I think you're missing the point. The demand for mortgage backed securities was generated by the banks, who marketed it as a "safe" investment. What made it unsafe was the fact that the banks couldn't find enough qualified home buyers, so they made risky loans. Without the loss of jobs, the banks wouldn't have had as large a pool of risky home buyers to give loans to. Instead, they'd have had a much larger pool of qualified buyers. No matter how you slice it, the root always goes back to jobs.

Now, if you want to look at the housing bubble/crisis as if it were an event occurring in a vacuum, I suppose you could blame it on a few managers at a few banks, pointing out as you correctly did that some banks didn't fall into the trap.

Right. They could do this because they had no intention of keeping the mortgages. Banks who kept their mortgages didn't suffer from such high foreclosure rates. Since those banks could not foresee customers losing their jobs, their lower rate of foreclosures is strong evidence that jobs being shipped overseas was not a primary factor.

Yes, they would have. Did you even read my previous post?

No, they wouldn't have. Sorry, but many, many people who were unable to pay their mortgages were unable to do so because the mortgage payments went up, not because they lost their jobs.

No matter how you slice it, the evidence doesn't support your assertion.

Sure I did. You're assuming that because the banks were willing to make bad loans, they'd have had the same number of people available to make bad loans to. I'm assuming that while the banks would have been willing to make bad loans, they'd have had many more qualified people to give loans and fewer unqualified people to take them. That would have brought down the number of bad loans.

No, those people got adjustable rate mortgages because of the banking industry's ridiculous idea that they could mitigate the risks of giving bad loans by charging more for them, but hiding the fees with low starter rates. Once again, if those people had better paying jobs, they wouldn't have needed the low starter rates and would have qualified for better, less risky loans. And we're back to jobs again.

Feel free to explain what the banks used for a crystal ball to see into the future in order to turn down loans top those who would lose their jobs after taking out loans if approved. Your argument rests on the banks having such an ability, at least if the argument is to be considered logical.

No, you're back to the jobs issue again. Those of us who have actually researched the causes of the crisis realize that there were other reasons that played a MUCH larger role.

No crystal ball necessary! They gave ARMs to people with poor credit and/or high debt/income ratios. The knew these people would have trouble, which is why they tried to charge them more. Completely illogical, but that's the way the banks did it!

Yes, those other issues figured more prominently in the specifics of the crisis, but that doesn't mean they played a larger role. Think of it this way: if everyone made great wages, they'd have been like my in-laws who paid cash for their home in the early 60s. No chance of a bad loan there, no matter what the banks did! Who pays cash for their first home in the US now? Practically no one, but it was fairly common 50 years ago when people were paid well.