Some good news for a change

[bwv 1080]

A brilliant economy brought to you not through willfully malicious legal avarice,

BTW I know some hedge fund guys who buy distressed RMBS and CDOs and their comment was that no two documents are the same, as the lawyers tried pretty much to re-invent the structures each time in order to run up the fees.

Careers at large law firms live or die by billable hours and pretty much nothing else

[MishaK]

A brilliant economy brought to you not through willfully malicious legal avarice, but through the incompetence and unintended consequences of a "perfect storm" caused by political efforts to expand mortgage lending among low-income borrowers which included shifting the risk burden from lenders to the GSEs and to investment banks via deregulation of derivatives for mortgage-backed securities.  And one consequence is that while 16% of Americans are out of work, you have plenty of work. 

Oh dear, you buy that blame-the poor-minorities, blame-Fannie/Freddie crap that the right dishes out? Fannie and Freddie were very late to the game. This was entirely concocted by the investment banks who wanted more and more mortgages to bundle, aided and abetted by compliant rating agencies and a dismantling of the regulatory framework by both parties in congress. Fannie and Freddie were not the cause of it, I can assure you, nor any "political efforts to expand mortgage lending among low-income borrowers". Waaay OT, but this is still one of the finest summaries of what happened: http://www.thisamericanlife.org/radio-archives/episode/355/The-Giant-Pool-of-Money

[DavidRoss]

Oh dear, you buy that blame-the poor-minorities, blame-Fannie/Freddie crap that the right dishes out? Fannie and Freddie were very late to the game. This was entirely concocted by the investment banks who wanted more and more mortgages to bundle, aided and abetted by compliant rating agencies and a dismantling of the regulatory framework by both parties in congress. Fannie and Freddie were not the cause of it, I can assure you, nor any "political efforts to expand mortgage lending among low-income borrowers". Waaay OT, but this is still one of the finest summaries of what happened: http://www.thisamericanlife.org/radio-archives/episode/355/The-Giant-Pool-of-Money

No blaming of minorities, no blaming of Fannie/Freddie.  Blaming what actually happened--pressure from govt--including litigation from the Justice Dept--to force mortgage lenders to make more risky loans in minority communities.  Both right and left thought it a generally good thing.  As lending standards were lowered, greedy speculators took advantage and since Fannie & Freddie would buy any paper that met their requirements, lenders were able to pass on the risk.  The new mortgage-backed securities became a hot investment property after both the Clinton administration and Republican Phil Gramm successfully pushed to deregulate derivatives, again with risk passed on through the GSEs and AIG.  These are the necessary conditions that set up the whole disaster.

Recognizing what happened and how the foundation was laid for greedy mortgage brokers, investors, speculators, and borrowers to take advantage is not "crap that the right dishes out."  It's what actually happened.  Refusing to recognize something so clear and obvious can only be partisan blindness-- unwillingness to acknowledge that "liberal" policies had anything to do with it, thus unwillingness to learn from the past, and--per Santayana's maxim-- assuring that the same sort of catastrophe will happen again.

If the liberal-left in this country really does hate that Wall Street profits while the middle and lower classes suffer, then they damned well better effing learn how their policies cause the conditions they bemoan.  Remaining in denial of the disastrous consequences of their well-intentioned efforts to use government to force outcomes they favor only assures more such disastrous outcomes. 

[MishaK]

unwillingness to acknowledge that "liberal" policies had anything to do with it

You do realize that above I did say that both parties were instrumental in dismantling the regulatory framework that could have prevented this, right? Sorry to not fit the partisan dogmatic strawman stereotype you'd rather fight.

As lending standards were lowered, greedy speculators took advantage and since Fannie & Freddie would buy any paper that met their requirements, lenders were able to pass on the risk.  The new mortgage-backed securities became a hot investment property after both the Clinton administration and Republican Phil Gramm successfully pushed to deregulate derivatives, again with risk passed on through the GSEs and AIG.  These are the necessary conditions that set up the whole disaster.

You've got things backwards. It is the pressure from investment banks and their investors that pushed lenders to create these NINJA loans and the like. It had nothing to do with Freddie and Fannie. Listen to the NPR piece I linked above and hear it from the horse's mouth, from the folks that created this mess.

Look, I'm the last person who thinks that pushing homeownership on everyone is the wisest course of action. Since most Americans move once every 5 years, it simply doesn't make sense economically for most people and it makes the labor force less mobile. But that said, what you are repeating here is a standard, ancient, Republican argument that gained currency due to the crisis, but still lacks merit. The framework involving subsidized lending for low income borrowers and the whole Fannie-Freddie construct is over three decades old. It makes no logical sense whatsoever that this thing was chugging along nicely for decades with no problems in sight and then one day, boom, it supposedly is the cause of this mess. At best, such an argument is extremely lazy empiricism, at worst (and more likely) the result of putting dogma ahead of reality. But, as I said before, this is way OT, and I sense that you don't really want to be persuaded...

[bwv 1080]

Ultimately the financial crisis was about one thing - leverage, which is the most important thing that has to be regulated in a banking system with public deposit insurance.  Had the banks been adequately capitalized, Franny, NINJA loans, Mezz CDOs and all the other garbage of the period would not have mattered.  The brokerage firms got the regulators to lower their cap requirements to 3% (i.e. 30-1 leverage) and the banks could lever AAA  & AA subprime garbage 62x (Basel Capital requirements were 1.6%).  This was total regulatory capture by Wall Street and the Banking Industry.

[MishaK]

Ultimately the financial crisis was about one thing - leverage, which is the most important thing that has to be regulated in a banking system with public deposit insurance.  Had the banks been adequately capitalized, Franny, NINJA loans, Mezz CDOs and all the other garbage of the period would not have mattered.  The brokerage firms got the regulators to lower their cap requirements to 3% (i.e. 30-1 leverage) and the banks could lever AAA  & AA subprime garbage 62x (Basel Capital requirements were 1.6%).  This was total regulatory capture by Wall Street and the Banking Industry.

Exactly. But moreover, with more stringent capitalization requirements there would have been less investment capital on the loose able to do damage by demanding more investment vehicles. 

[DavidRoss]

You do realize that above I did say that both parties were instrumental in dismantling the regulatory framework that could have prevented this, right? Sorry to not fit the partisan dogmatic strawman stereotype you'd rather fight.

When you say the entire mess "was entirely concocted by the investment banks who wanted more and more mortgages to bundle" and that neither the GSEs nor political efforts to expand homeownership were at fault, you are precisely quoting the partisan dogmatic party line that I described.

And when you try to shift the ground from the issues to attacking me and the demonizing the factual history of the mess as "right-wing crap," it is YOU who posits a "partisan dogmatic strawman stereotype you'd rather fight." 

You've got things backwards. It is the pressure from investment banks and their investors that pushed lenders to create these NINJA loans and the like. It had nothing to do with Freddie and Fannie. Listen to the NPR piece I linked above and hear it from the horse's mouth, from the folks that created this mess.

You do recognize that NPR is hardly an objective source of news and information?  That for many years it has been nothing more than a publicly funded mouthpiece of the partisan left?

The NPR story describes the problem as the mortgage meltdown.  But that was the result, not the cause.  Their story suggests that the whole mess began in 2003.  But the conditions that caused the mess--that made it possible for the unscrupulous to do what they did--started at least ten years before with Justice Dept prosecutions of lenders for prima facie racial discrimination based on traditional lending standards that favored people able to repay the loans. (i.e. Shawmut, Chevy Chase, Northern Trust) In 1995, the GSEs got into the subprime market with tax breaks for loans to low income borrowers:  http://www.washingtonpost.com/wp-dyn/content/article/2008/06/09/AR2008060902626.html In 1996, HUD set a goal for Fannie Mae and Freddie Mac that at least 42% of the mortgages they purchase be issued to borrowers whose household income was below the median in their area: http://online.wsj.com/article/SB122298982558700341.html

Then starting in '97, Clinton's HUD Secretary, Andrew Cuomo, according to <sarcasm>that notorious right-wing blog</sarcasm>, The Village Voice,  "turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded 'kickbacks' to brokers that fueled the sale of overpriced and unsupportable loans." http://www.villagevoice.com/content/printVersion/541234?ref=patrick.net

By 1999, Fannie and Freddie were already aggressively reducing credit requirements: http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=2

If we as a nation insist on believing fairy tales because of our partisan blinders, then we are just setting ourselves up to be plundered again.  This is how the scam works, how government officials and Fannie/Freddie are as much or more to blame than anyone: http://online.wsj.com/article/SB10001424052748704107204574475110152189446.html

Look, I'm the last person who thinks that pushing homeownership on everyone is the wisest course of action. Since most Americans move once every 5 years, it simply doesn't make sense economically for most people and it makes the labor force less mobile. But that said, what you are repeating here is a standard, ancient, Republican argument that gained currency due to the crisis, but still lacks merit. The framework involving subsidized lending for low income borrowers and the whole Fannie-Freddie construct is over three decades old. It makes no logical sense whatsoever that this thing was chugging along nicely for decades with no problems in sight and then one day, boom, it supposedly is the cause of this mess. At best, such an argument is extremely lazy empiricism, at worst (and more likely) the result of putting dogma ahead of reality. But, as I said before, this is way OT, and I sense that you don't really want to be persuaded...

It makes perfect sense when you look at all the facts instead of only the ones pleasing to your partisan prejudices.  During the '90s significant changes in government policy (documented above) pressured lending institutions to forego traditional prudent lending standards and passed the risk on to GSEs (and implicitly the taxpayer), to mom-and-pop shareholders in institutional funds, and to taxpayers through govt bailouts.

Of course, it all really began with some critical legislation back in the '80s: http://money.cnn.com/2008/01/30/real_estate/congress_subprime.fortune/

[MishaK]

Your motley assortment of cherry-picked facts ignores the critical question: if all the groundwork was laid so much earlier, as you claim (some of it in the 80s, some in the 90s), why then did it not all blow up much earlier? Why not, say in 1996? Why, instead did the market blow up in 2008? This is the question that can't be answered if one subscribes to such a myopic view of things as you do.

Look, nobody says the system was perfect pre-2008. Far from it. But the blame has to go to those who do the actual damage by abusing the system for personal gain, while hiding the risks from others. I am not saying that none of the items you list is true, or that it didn't contribute to some small amount in setting the stage. But the actors on that stage were the bankers, the investors, the lawyers who created the documentation for CDOs etc., the rating agencies, and the mortgage brokers and bundlers.

You do recognize that NPR is hardly an objective source of news and information?  That for many years it has been nothing more than a publicly funded mouthpiece of the partisan left?

Statements like that make you sound mentally deranged. Sorry, I grew up in Europe. We have a broader political spectrum than you do here. NPR is hardly leftist by any measure. If you won't even listen to the piece just because of the byline, I can't help you.

[Florestan]

it appears that what is happening in law is similar to what happened in mathematical analysis and I expect the course will be similar.  I don't imagine that computers will ever be able to accomplish the task themselves.  But I expect they will allow a single lawyer to accomplish a lot more a lot faster using the tools than not using the tools, just as numerical analysis software packages allow people who only half-understand what they are doing to perform a lot of analysis that would have required a lot more people who understood what they were doing a lot better. 

Actually this isn't quite true. I am a mechanical engineer and used numerical softwares for years. Trust me, someone who has no clear idea about what he wants the software to do (and how it is supposed to do it) has zero chances of getting a meaningful result.

I'm with Mensch on this one: a computer does nothing else and nothing more than what its user wants it to do. The golden rule is "garbage in - garbage out".

There are people --- not you, of course, and no one here that I'm aware of --- who think that a computer can turn a layman into a functional engineer / lawyer / mathematician  / whatever. This is one of the greatest fallacies of our times and it is due to the mindless computerization of every aspects of our social and professional life --- mindless precisely in the sense that a lot of people think that a computer can replace the thinking human person; well, it can't. It is one thing to use it for googling stuff, which anyone who is not an idiot can do  --- and a completely different thing to use it for engineering computations, which only a trained engineer can do in a meaningful and useful way. And I'm sure this is true for any other professional use of the computer.

[Florestan]

if all the groundwork was laid so much earlier, as you claim (some of it in the 80s, some in the 90s), why then did it not all blow up much earlier? Why not, say in 1996? Why, instead did the market blow up in 2008?

Well, you could as well ask: if the French Revolution started in 1789 then why didn't Napoleon rise to power much earlier? Why not, say in 1792? Why, instead did he crowned himself emperor in 1804?

Look, I'm not taking sides. I just point out the obvious facts that (1) most historical causes do not produce their effects on the spot and (2) a momentous historical event is the result of myriads of streams that were set in motion long before it actually happened and converged just at the "right" time --- but I'm sure you know all this very well. 

[DavidRoss]

Your motley assortment of cherry-picked facts ignores the critical question: if all the groundwork was laid so much earlier, as you claim (some of it in the 80s, some in the 90s), why then did it not all blow up much earlier? Why not, say in 1996? Why, instead did the market blow up in 2008? This is the question that can't be answered if one subscribes to such a myopic view of things as you do.

Look, nobody says the system was perfect pre-2008. Far from it. But the blame has to go to those who do the actual damage by abusing the system for personal gain, while hiding the risks from others. I am not saying that none of the items you list is true, or that it didn't contribute to some small amount in setting the stage. But the actors on that stage were the bankers, the investors, the lawyers who created the documentation for CDOs etc., the rating agencies, and the mortgage brokers and bundlers.

Statements like that make you sound mentally deranged. Sorry, I grew up in Europe. We have a broader political spectrum than you do here. NPR is hardly leftist by any measure. If you won't even listen to the piece just because of the byline, I can't help you.

(1) Characterizing documentation that shows how the meltdown happened over a fifteen year period is NOT a "motley assortment of cherry picked facts" but a cohesive case constructed from precisely the relevant facts.

(2) The myopic view is yours, attempting to focus only on the period from 2003-2008, and not the previous period that created the situation--and focusing only on the unscrupulous bankers, and not on the unscrupulous or just plain bloody stupid politicians who created the problem by tinkering throughout the  '90s with a system that more or less worked until they buggered it.

(3) No, I'm not exonerating greedy financiers or mortgage brokers or real estate speculators or homeowners.  But there is nothing new about such sliminess, nor is it surprising that slimy folks will take advantage of such opportunities.  They've been doing it for thousands of years.  The real blame, therefore, goes to the politicians who for various reasons buggered a functioning system and made the crimes of others possible.

(4) It's also predictable that where power exists to bugger things for the advantage of a special interest, that special interest will seek to control that power and use it.  That's why it's necessary to understand that government intervention in the market was the proximate cause of the mess.  The solution is not giving government even more power to make bigger messes in the future, but to restrict their power to make such messes ever again.

(5) I have listened to and financially supported NPR for forty years.  Its bias has become so extreme in recent years that no one in his right mind can fail to recognize it.  That hardly prevents me from listening to it, however, or from reading items published on its site.  You've just made another false strawman attack intended to demonize me and thus dismiss my perspective.  Pity that such ploys are not as transparent to you as to any objective observer.

(6) Also false is the claim that Europe has a broader political spectrum than the U.S.  It's just that the left end of the spectrum has, in most European states, achieved more success in electoral politics, whereas the U.S. generally favors the classical liberalism that has engendered the greatest social and economic blessings the world has ever seen. 

[MishaK]

(3) No, I'm not exonerating greedy financiers or mortgage brokers or real estate speculators or homeowners.  But there is nothing new about such sliminess, nor is it surprising that slimy folks will take advantage of such opportunities.  They've been doing it for thousands of years.  The real blame, therefore, goes to the politicians who for various reasons buggered a functioning system and made the crimes of others possible.

(4) It's also predictable that where power exists to bugger things for the advantage of a special interest, that special interest will seek to control that power and use it.  That's why it's necessary to understand that government intervention in the market was the proximate cause of the mess.  The solution is not giving government even more power to make bigger messes in the future, but to restrict their power to make such messes ever again.

Bravo! That right there is the crux of the contradiction of the rightwing credo when it comes to explaining the meltdown: we had supposedly a wonderfully functining regulatory regime that could have prevented this mess, except it was dismantled and perverted by (mostly liberal) politicians (and institutions like Frannie). So the obvious conclusion is: let's destroy even the remaining bit of power that government has in regulating the financial industry, because clearly the problem is government, not the financial industry, right? Except, oops!, it was government that created that supposedly brilliant regulatory system in the first place, before it was dismantled at the behest of ... you guessed it .... the financial industry!!! So we punish government for its regulatory failure by denying them the power to ever regulate again, and this is somehow supposed to stop another meltdown??? I don't know how you can live with this incoherent jumble in your head. I just can't argue with that. I'm wasting my time here.

(6) Also false is the claim that Europe has a broader political spectrum than the U.S.  It's just that the left end of the spectrum has, in most European states, achieved more success in electoral politics, whereas the U.S. generally favors the classical liberalism that has engendered the greatest social and economic blessings the world has ever seen. 

Three things: a) there is more than just "left" and "right" to a healthy political spectrum. Alas, we haven't had one in decades in the US. b) your assertion about left wing success in Europe doesn't hold water, given that right wing parties have been in power for longer in most key European economies since WWII, and currently they are in power in all major countries (Germany, France, Italy, UK, etc.); c) there was a very telling bit in the German magazine der Spiegel a few days ago by a German exchange high school student who is in the states. I'll translate the relevant bit for you:

Liberals are Those Who Think Conservatively
...
What is liberal in the US, is called conservative in Germany

Particularly interesting was a civics class at the school, in which we discussed the political shift towards the right and later filled out a questionnaire. At the end, our political attitude was supposed to be measured from our responses. I tried a little experiment. I answered all questions from a German perspective with as conservative or politically right-wing views as possible.

If I, for example, agreed that gun ownership should be permitted, but only with a license, I received zero conservative points for that. Further questions followed. At the end, I was told that I have a leftist-liberal political attitude, even though I had responded from a German perspective as a right-wing conservative.

[MishaK]

Well, you could as well ask: if the French Revolution started in 1789 then why didn't Napoleon rise to power much earlier? Why not, say in 1792? Why, instead did he crowned himself emperor in 1804?

Look, I'm not taking sides. I just point out the obvious facts that (1) most historical causes do not produce their effects on the spot and (2) a momentous historical event is the result of myriads of streams that were set in motion long before it actually happened and converged just at the "right" time --- but I'm sure you know all this very well. 

That's not the issue. The issue is that, if you present a theory of causality, you have to show the causal nexus. If the alleged cause is temporally quite removed from the observed effect, you have to explain why the delay happened and why intervening events in the period in between are not in fact causally more related to the result. This is simple, straightforward empiricism. The larger the gap, the more explaining you've got to do because the variables don't stay constant in the interim. It may very well be right that the more remote cause is the real cause rather than the more temporally proximate event. But that needs to be explained and demonstrated. Otherwise Occam's razor says the temporally closer event that requires less explanation is more likely to be the real cause.

[DavidRoss]

Bravo! That right there is the crux of the contradiction of the rightwing credo when it comes to explaining the meltdown: we had supposedly a wonderfully functining regulatory regime that could have prevented this mess, except it was dismantled and perverted by (mostly liberal) politicians (and institutions like Frannie). So the obvious conclusion is: let's destroy even the remaining bit of power that government has in regulating the financial industry, because clearly the problem is government, not the financial industry, right? Except, oops!, it was government that created that supposedly brilliant regulatory system in the first place, before it was dismantled at the behest of ... you guessed it .... the financial industry!!! So we punish government for its regulatory failure by denying them the power to ever regulate again, and this is somehow supposed to stop another meltdown??? I don't know how you can live with this incoherent jumble in your head. I just can't argue with that. I'm wasting my time here.

Three things: a) there is more than just "left" and "right" to a healthy political spectrum. Alas, we haven't had one in decades in the US. b) your assertion about left wing success in Europe doesn't hold water, given that right wing parties have been in power for longer in most key European economies since WWII, and currently they are in power in all major countries (Germany, France, Italy, UK, etc.); c) there was a very telling bit in the German magazine der Spiegel a few days ago by a German exchange high school student who is in the states. I'll translate the relevant bit for you:

Good thing you're not a trial lawyer, for you keep assuming facts not in evidence.  No one that I know of suggests that we had "a brilliantly functioning regulatory scheme."  What we had was adequate, and the deregulation of derivatives perpetrated jointly by leading Republicans and Democrats, as explained above, was but one one element contributing to the meltdown.  You've shifted the ground again (a tactic of limited value in debate and of no use whatsoever in attempting to discover the truth), from giving government officials power to interfere with functioning markets (which was the proximate cause of the meltdown), to preventing government from exercising legitimate authority to prevent fraud and the like.

Yes, there is more than "left" and "right"... indeed, that perception of polarization that serves the partisan interests of Democrats and Republicans is something that fewer and fewer Americans buy into.  I don't know what things you've been doing during your time in America, but paying attention to politics and economics is clearly not one of them.  Damn near every political perspective you can imagine has a voice here--even anarchism.  But the American political process is such that--nationally, at least--any position that strays too far from the status quo has no chance of electoral success, possibly because it gets so marginalized by the mainstream press that it might as well not exist.  But exist, they do.

If you pay attention to what I actually say rather than attacking what I did not say you will waste fewer words with irrelevant comments.  You even quoted what I actually said in response to your claim that Europe's political spectrum is wider than the US's: "the left end of the spectrum has, in most European states, achieved more success in electoral politics."  The truth of that assertion would seem self-evident:  no leftist third party in the U.S. has had the success that Labor has in Britain and the Netherlands, the Communist Party in Italy, the Socialist Party in France, the Left Party in Germany, the Social Democrats in Sweden, and so on.

Yes, high school students in America also think that what this German exchange student says is true.  Most of us who grow up and learn to reason for ourselves and to think more clearly, however, eventually learn to recognize this as BS, an easy way to avoid thinking by repeating dumb propaganda.

Perhaps, if we really wish to have a meaningful exchange about this issue, we should begin by defining terms:  I suspect that you and I have very different ideas about the fundamental ideological split between "left" and "right."  However, as you suggest, I would agree that such a continuum is a very shallow model.  The X-Y matrix isn't perfect, but is a bit more useful.  Per this test http://www.politicalcompass.org/index I score -3.38,-4.46 --right about where I usually score on such tests, which rather foolishly use stereotypical positions on polarizing issues rather than one's principles to determine where one fints in the political spectrum.

[bwv 1080]

The Socialist government of Spain was not able to prevent a credit bubble, and it occurred within the politically run Cajas, not the large profit-oriented banks like BBvA or Santander.

The reality is that democratic government quickly become powerless to stop a credit bubble - it is too politically difficult to take the steps necessary before the crash.  Think about the gov doing something like raising capital requirements on banks in 2005 or 2006 - people in housing and mortgage finance would have lost their jobs, house prices would stop appreciating and the economy would have slowed.  No politician could survive that

[DavidRoss]

You do recognize that NPR is hardly an objective source of news and information?  That for many years it has been nothing more than a publicly funded mouthpiece of the partisan left?

Statements like that make you sound mentally deranged. Sorry, I grew up in Europe. We have a broader political spectrum than you do here. NPR is hardly leftist by any measure.

What serendipitous timing.  In today's Washington Post: http://www.washingtonpost.com/wp-dyn/content/article/2011/03/09/AR2011030901802.html?hpid=topnews

[MishaK]

What serendipitous timing.  In today's Washington Post: http://www.washingtonpost.com/wp-dyn/content/article/2011/03/09/AR2011030901802.html?hpid=topnews

CEO takes fall for impolitic statement by subordniate. What's new under the sun? If NPR was as biased as you allege, they would have not only stood by that statement, it would be part of their broadcasted message, not something said inofficially in private meetings. Besides, what is even debatable about some elements of the Tea Party being xenophobic and the movement having hijacked the Republican party?

We can keep going in circles like this, since you seem to think that anything that doesn't conform to Republican mantra is "liberal", ergo I must be "liberal" and "ideologically myopic/blinded". In the meantime, you're avoiding answering the obvious logical gaps in your argument. Namely:

1. If the root causes go back much further, why did the meltdown happen in 08, not much earlier, and why should intervening, more temporally proximate potential causes be disregarded?

2. Why, if deregulation is (at least part of) the cause, do you want to completely castrate government by making it "smaller" and even less able to monitor Wall Street?

3. Do you just dogmatically believe the market to be infallible, or do you consider such a thing as a "market failure" even a possibility?

[MishaK]

Yes, there is more than "left" and "right"... indeed, that perception of polarization that serves the partisan interests of Democrats and Republicans is something that fewer and fewer Americans buy into.  I don't know what things you've been doing during your time in America, but paying attention to politics and economics is clearly not one of them.  Damn near every political perspective you can imagine has a voice here--even anarchism.  But the American political process is such that--nationally, at least--any position that strays too far from the status quo has no chance of electoral success, possibly because it gets so marginalized by the mainstream press that it might as well not exist.  But exist, they do.

  Which statement is so radically different than my saying that the US has a very limited political spectrum.  Yet, you find the need to belittle me in respect to my statement, even though you essentially agree. Never mind also that my (US) undergraduate degree was in political science.

[Archaic Torso of Apollo]

A follow-up

http://www.law.com/jsp/lawtechnologynews/PubArticleLTN.jsp?id=1202543509008&slreturn=1

"a much-anticipated computer-assisted review opinion on Friday, acknowledging that it "appears to be the first in which a Court has approved of the use of computer-assisted review" in electronic data discovery"

Hmmmmmm....

[drogulus]

Ultimately the financial crisis was about one thing - leverage, which is the most important thing that has to be regulated in a banking system with public deposit insurance.  Had the banks been adequately capitalized, Franny, NINJA loans, Mezz CDOs and all the other garbage of the period would not have mattered.  The brokerage firms got the regulators to lower their cap requirements to 3% (i.e. 30-1 leverage) and the banks could lever AAA  & AA subprime garbage 62x (Basel Capital requirements were 1.6%).  This was total regulatory capture by Wall Street and the Banking Industry.

     Yes, this is a big part of it, and smaller government is total capture, not an answer to the capture problem. Really, there is no permanent solution, because market actors will always move away from regs or capture the regulators. Government isn't in the business of providing permanent fixes, its goal should be to respond to current circumstances in the light of experience.