A Man-Made Recession

I have often commented in the past on our economic financial meltdown; I think it’s worthwhile repeating.

Too many folks are still getting misled by the slanted media and by politicians.

One lesson: Up and down economic cycles are normal, but excesses may have other causes.

Second: The current financial meltdown started as a direct result of a concerted government policy of making home mortgages available to folks who could not afford to have those mortgages.

Three: Government pressure, and threats of law suits from “do-gooders,” in addition to the opportunity for profit by banks, who collateralized the mortgage obligations (CDOs) that facilitated mortgage sales the world over.

Four: Government-licensed rating agencies gave these CDOs the AAA ratings that assured the global sale of the securities.

Therefore, a bubble grew until, like all bubbles, it burst.

To add to the bad psychology that accompanies any bust, the government came in with a series of disastrous man-made steps.

Furthermore, the decision to determine bank value on a daily fictitious basis.

Then, catastrophic unnecessary bailouts of banks, and buy-ins of auto companies when ordinary guarantees would do. The government takeover of AIG was unnecessary when an ordinary bankruptcy would do less damage.

In short: The government has seen to it that a slight economic downturn has become a Great Recession. With an unconscionable deficit to go with it.