MSU Red Cedar Message Board

Well, perhaps you should expand your critical thinking skills and analysis tools beyond what Webster's can provide. A very little bit of research will show that they are two very different concepts.

Societies should aim for equity, not equality (except of course for some absolutes, human rights for example). Now before you respond, read up and try to understand what is being said here.

And yes, free market (Friedman's baby) failures are responsible for this very economic mess we are in right now. How anyone with any training could claim they aren't failing is beyond me.

Militants are telling the rioters to topple the government.

I've already mentioned one major way: Stop putting so much emphasis on GDP as a measure of economic health, and start using more quality of life metrics. Equity "simply" means putting major emphasis into concepts like fairness and justice and ethics into our economic systems, rather than profits only.

And it's the exact opposite of foolishness to recognize the free market failures that led to the mess we are in today.

How would you label, the unregulated risk laden greed? the undisclosed conflicts of interests? the rampant fraud? the inaccurately priced risk of the multitude of relatively new mortgage-related financial products and procedures? Those weren't failures of the free market? Then WHAT WERE THEY?

How hasn't this been sent to Wells yet?

I've never really understood why people care.

Is this thread stopping you from reading the 5 or so actually sports threads on the front page? Is it stopping you from starting a new thread if you want?

No on both counts, so why do you care?

I would agree that there was massive fraud......which was a failure of regulation not of the free market. Since a free market is never perfect (meaning all the players do not have all market information) we need government to regulate the actions of the market. The fraud was allowed to occur over the course of many years not due to the lack of regulation, it was due to the lack of enforcement. The rating agencies were the main culprit as they did not expose the risk associated with the mortgage backed securities.

I would also argue that government intervention, and not market forces, allowed for the massive growth in bad mortgages. If Fanny and Freddie were not buying up all the mortgages, the companies who initially underwrote those mortgages would have been the only ones exposed to their poor practices. But since we had the the NGO's buying up all the loans the mortgage companies could write all the bad loans they wanted because they knew they could sell those loans and not expose themselves to the losses that were to come.

1. In a true free market there would be NO regulation. You get that right? Your explanation above makes no sense. The rules were written but not enforced and certainly not followed is what you claim. So the solution is to have NO rules, then everything would be peachy?

2. You write: "The rating agencies were the main culprit as they did not expose the risk associated with the mortgage backed securities.
" EXACTLY! That is a failure of what supposed to be a self regulating market.

3. Yes, there is a gov't role in this as well, but anyone denying that this crisis was mainly based on what I've mentioned above ( unregulated risk laden greed; the undisclosed conflicts of interests; the rampant fraud; the inaccurately priced risk of the multitude of relatively new mortgage-related financial products and procedures) is delusional. No offense.

Then there are insurance policies on the mortgage backed securities.

The whole thing blows up in everyone's faces, so in a free market those companies are gone they can't come up with the assets to cover those losses. But no, the US government steps in and starts throwing money around. We'll buy those securities for full price plus, plus pay off insurance policies and float cash to banks and AIG. Then we'll set short term interest rates at 0%, so banks can get free cash to invest in US treasuries (oh, we were supposed to give that money to businesses as loans, sorry), because the government has to print money to cover all the stuff they're throwing around to save the "free" market. Lo and behold, banks are quickly making money hand over fist and still not giving out any loans to small businesses, because, you know, it's such a risky environment. And the head cheerleader for the Tea Party, Michelle Bachmann, voted for the TARP. You can't make this shit up.