Greenspan was 1/2 right about regulation – the part he was right about was that oversight was missing. He was wrong that more was needed, or even that his views were wrong. He was forced to make those statements by the prevailing political wisdom of the times. It’s a shame he no longer sticks to his guns the way he did when he was a younger man.

There was no way any federal bodies could have warned us of this – warning consumers of this is a difficult task, and often leads to Cassandra complexes. Fact is, if YOU didn’t see it coming, your head was in the sand. The problem is always a simple one: HOW BAD WILL IT BE?
Even I, a simple man with a regular job who happens to have a Master’s in Econometrics, saw the housing bubble and recognized the danger it entailed. I knew the day of reckoning was approaching when I saw “Sold Out” signs on condos in Florida, but nobody living in the finished products. Sorry if none of you saw it, or listened to the people who did. But the government’s job isn’t to warn us….if they warn us, they set off a panic – don’t they (just look at Obama’s fearmongering in Jan/Feb)?

Fact is, while oversight could have prevented some portions of this mess, and certainly kept it from boiling over to the point we are currently at, we still would have had a tough row to hoe. Why? Because we all want to believe that UP is the only direction that is meaningful. As an economist, I know this is incorrect. When I hear “the economy is broken”, I LAUGH. It’s not broken. It’s doing what it ALWAYS does after a boom. It’s readjusting to the excess. This is NORMAL. This is why we prepare for bad times during the good (remember the story of the grasshopper and the ant? Oh, you missed that one? Sorry…that’s what socialized education does to you.)

Look – we needed more oversight to prevent excesses and predatory behavior. But we also needed responsible consumers. Anyone STUPID – YES STUPID – enough to take out a $500,000 mortgage when they earn $45,000 a year ISN’T BEING PREYED UPON. They are idiots. Being PREYED upon is something that happened to me – being sold one mortgage and getting another. Luckily, I’m not an idiot and I changed mortgages after 2 months and sued.

I cannot help but laugh when people think the government can get us out of this. It never works that way, folks. You have to get yourself out. Live economically, live within your means, take cautious risk when it’s available, but take the BEST opportunities when they present themselves.

I like Flexo because he’s all about pointing out opportunities with interest rates, credit cards, etc. But let’s be honest folks, there is no white knight in Washington, DC. There never was. If you want the government to help, please consider the areas it has performed “best” and longest:
The DMV – who likes going there?
The Post Office – yes, they’re so good they are losing to their competition…and still raising their rates.
AMTRAK – with one profitable corridor in the Northeast, they are able to subsidise the rest of their routes with taxpayer money, brilliant business strategy
IRS – OK this is one area where the government is brutally efficient. Um, sort’ve. They still lose out on a huge amount of uncollected taxes each year….but they do have some very good people working there and let’s face it, when it comes to collecting money, everybody puts their best foot forward.

So you want the government to help? Good luck. Keep asking. I’ll find an island and move.
We have plenty of rules and regulations. Let’s just enforce them. In the meantime, go read about the grasshopper and the ant. Then read “The Richest Man in Babylon”.

Folks, if you weren’t prepared, it’s not MY fault, and it’s not the government’s fault. So let’s stop asking for taxpayer funds to keep bailing out everybody…eventually there are no funds left to bail out anybody. It starts becoming monopoly money.

For any regulation to be effective governments need to think on a global scale. To many inconsistencies exist from country to country. International standards are going to play a bigger role in how the markets are regulated.

There should be regulations about selling and reselling mortgages with standard ways of valuing and describing them. If in the future someone sells a bundle of garbage and labels it “Investment Grade A” then someone should go to jail, be it the insurance company that doesn’t back the Grade A or the person who sold it who misrepresented the contents.

There is also a strong case for fannie and freddie causing a bubble in the housing market and that leading to the housing collapse and then the recession. Once again it was a lack of government acting on its own regulations that permitted this to happen. So what we are seeing is that government is plain incompetent.