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Thread: U.S. gambles blamed for world’s financial crisis

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    Default U.S. gambles blamed for world’s financial crisis

    http://www.msnbc.msn.com/id/26962762/

    Looks like U.S. style free-market capitalism has (finally) run its course...

    Might some form of socialism be making a comeback?

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    Default Re: U.S. gambles blamed for world’s financial crisis

    Another great article

    The End Of American Capitalism?

    The worst financial crisis since the Great Depression is claiming another casualty: American-style capitalism.

    Since the 1930s, U.S. banks were the flagships of American economic might, and emulation by other nations of the fiercely free-market financial system in the United States was expected and encouraged. But the market turmoil that is draining the nation's wealth and has upended Wall Street now threatens to put the banks at the heart of the U.S. financial system at least partly in the hands of the government.

    The Bush administration is considering a partial nationalization of some banks, buying up a portion of their shares to shore them up and restore confidence as part of the $700 billion government bailout. The notion of government ownership in the financial sector, even as a minority stakeholder, goes against what market purists say they see as the foundation of the American system.


    Yet the administration may feel it has no choice. Credit, the lifeblood of capitalism, ceased to flow. An economy based on the free market cannot function that way.

    The government's about-face goes beyond the banking industry. It is reasserting itself in the lives of citizens in ways that were unthinkable in the era of market-knows-best thinking. With the recent takeovers of major lenders Fannie Mae and Freddie Mac and the bailout of AIG, the U.S. government is now effectively responsible for providing home mortgages and life insurance to tens of millions of Americans. Many economists are asking whether it remains a free market if the government is so deeply enmeshed in the financial system.

    Given that the United States has held itself up as a global economic model, the change could shift the balance of how governments around the globe conduct free enterprise. Over the past three decades, the United States led the crusade to persuade much of the world, especially developing countries, to lift the heavy hand of government from finance and industry.

    But the hands-off brand of capitalism in the United States is now being blamed for the easy credit that sickened the housing market and allowed a freewheeling Wall Street to create a pool of toxic investments that has infected the global financial system. Heavy intervention by the government, critics say, is further robbing Washington of the moral authority to spread the gospel of laissez-faire capitalism.

    The government could launch a targeted program in which it takes a minority stake in troubled banks, or a broader program aimed at the larger banking system. In either case, however, the move could be seen as evidence that Washington remains a slave to Wall Street. The plan, for instance, may not compel participating firms to give their chief executives the salary haircuts that some in Congress intended. But if the plan didn't work, the government might have to take bigger stakes.

    "People around the world once admired us for our economy, and we told them if you wanted to be like us, here's what you have to do -- hand over power to the market," said Joseph Stiglitz, the Nobel Prize-winning economist at Columbia University. "The point now is that no one has respect for that kind of model anymore given this crisis. And of course it raises questions about our credibility. Everyone feels they are suffering now because of us."

    In Seoul, many see American excess as a warning. At the same time, anger is mounting over the global spillover effect of the U.S. crisis. The Korean currency, the won, has fallen sharply in recent days as corporations there struggle to find dollars in the heat of a global credit crunch.

    "Derivatives and hedge funds are like casino gambling," said South Korean Finance Minister Kang Man-soo. "A lot of Koreans are asking, how can the United States be so weak?"

    Other than a few fringe heads of state and quixotic headlines, no one is talking about the death of capitalism. The embrace of free-market theories, particularly in Asia, has helped lift hundreds of millions out of poverty in recent decades. But resentment is growing over America's brand of capitalism, which in contrast to, say, Germany's, spurns regulations and venerates risk.

    continued......

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    Default Re: U.S. gambles blamed for world’s financial crisis

    Of course stupid financial decisions by the public also were a major cause.

    Let's hope that de-regulated capitalism (i.e., greed, hedonism, narcissism) will be throttled. But I highly doubt it because to extreme capitalists, this is the fuel that runs the economy.
    Last edited by threlayer; 12-07-2008 at 12:59 PM.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: U.S. gambles blamed for world’s financial crisis

    Quote Originally Posted by threlayer View Post
    Of course stupid financial decisions by the public also were a major cause.

    Let's hope that de-regulated capitalism (i.e., greed, hedonism, narcissism) will be throttled. But I highly doubt it because to extreme capitalists, this is the fuel that runs the economy.
    A more 'mixed' economy with heavier government intervention looks to be in the cards...

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    Default Re: U.S. gambles blamed for world’s financial crisis

    Quote Originally Posted by threlayer View Post
    Of course stupid financial decisions by the public also were a major cause.

    Let's hope that de-regulated capitalism (i.e., greed, hedonism, narcissism) will be throttled. But I highly doubt it because to extreme capitalists, this is the fuel that runs the economy.
    Economy based on Hedonism? On Narcissism?

    Best be careful.

    That is the economy of a strip club.

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    Default Re: U.S. gambles blamed for world’s financial crisis

    ^^ And for the most part they have stupid management too.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: U.S. gambles blamed for world’s financial crisis

    Poor government intervention, not a lack of, failed us here. Like all things Capitalism is great (in my opinion the best choice) when done properly. We've failed to let it work properly, and that rests on the shoulders of everyone, business, government, and the people.

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    Default Re: U.S. gambles blamed for world’s financial crisis

    ^^ Now THAT I just have to agree with.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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