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[quote user="henry6"][quote user="Bucyrus"] henry6,For what reason can you not agree with most of what I said?  What is the part you can agree with?[/quote] First, I my fear is that the post has wandered too far away from the railroad theme to be sustained.I cannot agree with your assessments of what happened duirng the credit crunch.  I do blame overzealous investment bankers on pressuring for loans, credit, and mortgages to people who really didn't understand what thier ulitmate burden and responsibility would be nor the consequences should things go wrong.  I also don't agree that there shouldn't have been more, or at least enforced, oversight and regulation.  To me, and many others, those investment bankers knew that they could get away with their personal fortunes while the government would have to hold the bag.  If there had been oversight and enforcement of exisiting regulations then the government, with public monies, would not be bailing them out.  And I hardly believe the government forced the pushing of these loans by lenders.  About the only thing I can agree on is that the present situtation will force the price of housing down.What I really wish could have happened is that everyone with one of these so called bad mortgages were given a direct payment from 50 to 90% of thier mortgage value and put the onus of payment to the lenders on the borrowers.  This would have sorted out the good and the bad boys on both sides of the problem.  The follow thorugh, however, would be stricter oversight and regulations by government and the removal of the so called leaders of the financial industry with penelty for any criminal misdeeds (which have to be proven).  Yes, we have lost control of our government and allowed it to lose control of our country.  We have to get things back under control.  I believe, unlike what has been presented here, that those in charge of our business community have, in the name of economical operations and profit, have at all costs, moved the country's money overseas.  Even the Robber Barons of the 19th and 20th Century worked at building American industry and communities, not tearing them down and sending Main St., USA and its supporting factories to Asia or elsewhere.  If our population cannot buy houses, cars, appliances, etc., because big business doesn't employ them, then there will be more down turns in American life and  big business and its investors cannot complain about being looked at with suspicion with a feeling they be regulated. But I really feel that this crisis, coupled with a lot of economic and evnironmental matters especially in the area of transportaion, is leading to a greater middle ground of cooperation and and joint projects.  The best of Capitalism and Socialism will be operate in consortium to bring the USA through the 21st Century without capitulating or giving way to anyother country.  There probably will be pendulum like swings one way or the other at times, but overall, both business and government know today that survival of both is in each others hands.  Each side has to trust the other a little bit more, but each side has to accept more responsiblity, too, to make it happen.[/quote]Thanks for your feedback.  I surely agree with you and NKP guy when you say that capitalism has been suddenly altered permanently and that we are standing on the edge of a precipice.  But I don't agree that one must understand what derivatives and credit default swaps are in order to understand what caused the housing crisis.  The actual culprits would love to have us believe that.  And I am certainly not blaming "...a poor yutz who just wants to own a house, even if he can't afford it," as NKP guy suggests.  That is another red herring, to say that those who criticize the government motive of providing taxpayer subsidized housing are picking on the poor and homeless.Your preference to see the government give direct payments to the mortgage holders is interesting.  That would indeed shake out the truth of who is and is not capable of paying their loan.  Otherwise we will have beauacracies deciding which mortgages to buy out, and because nobody can predict the future, we will never know whether the borrowers could have serviced the loans that the government bought. But the way I look at it, it really does not make much difference how well this works or if it works at all-or-if it makes the problem worse, which it very well might.  The reason that it doesn't make any difference is because the main motivation has been fulfilled.  That is that a hungry government, expanding out of control, has just had another 3/4 -trillion dollars laid on its plate.  Government talks a lot about corporate greed these days.  But a government that cannot stop feeding itself on other people's money is the true embodiment of greed.  I will bet you that ¾-trillion will not be enough.  There is no such thing as enough when it comes to funding the public sector.I don't see socialism and capitalism working together as you hope for.  How can they work together?  They are in direct opposition, and mutually exclusive.  How can both sides in a tug-of-war work together?  More socialism requires a bigger government, and government has a self-interest in getting bigger and expanding its power.  So the government system naturally pulls to the left.  On Friday, socialism got a lot bigger in the U.S., and capitalism got correspondingly smaller.  It had always seemed like the most probable vector for socialism to make a big inroad to our system would be socialized medicine.  Energy, housing, and transportation are also in the sights of socialism, but healthcare has long been considered the low hanging fruit.    On Friday, socialized housing leapt to the front of the line.  And as an indication of the stealthy and predatory nature of socialism in general, it snuck in through the back door, completely circumventing our representative republic system.  Oh sure, congress debated the spending, but the debt was created completely out of the public's view and without their consent, starting back in the 1990s.  The government created a lot of cheap housing for people who could not afford it, and now they have asked the public to pay for it. You say you blame the housing crisis on overzealous lenders and not on government pressure.  The popular perception is that the blame lies with the borrowers who borrowed too much or the lenders who pressured the borrowers to borrow too much; the so-called predatory lenders.  But those are red herrings intended to deflect the blame from the government policy and the specific politicians who produced it.  Predatory lenders do not make loans to people who cannot pay them back.  Predatory lenders make loans to people who can pay them back, but should not borrow the money.  And in a normal free market system, people cannot possibly borrow more than they can afford, because lenders will not lend them more than they can afford.I disagree that more oversight would have prevented the need for this bailout.  You cite the investment bankers who made a lot of money and left the government holding the bag.  My point is that the government should not have been holding the bag in the first place.  "Holding the bag" was the guarantee that took the risk away from the lenders and placed it on the public.And the government did indeed pressure lenders, under threat of prosecution, to make loans to under-qualified borrowers on the basis that failing to do so amounted to discrimination.  Both the federal pressure to make loans and the federal assumption of risk were introduced through the Community Reinvestment Act and through Freddie Mac / Fannie Mae.I realize that this entire explanation may seem to fly in the face of what you have come to believe.  But this story is now even beginning to seep into the mainstream news media.  So it won't be long before it is widely understood by the public. Take a good look at this article that Greyhounds posted above from the New York Times in 1999.  It not only describes in detail what I have said here about the government causing the housing crisis, but also heaps praise upon the motive as if it were government altruism.  Leave it to the NYT to endorse the Nanny State.  Now we have a textbook case of seeing where it leads:   <a href="http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&s">http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&s</a>...   P.S. Not only are we well on our way to socialized housing, but we are also heading down the road to socializing financial risk; perhaps the most dangerous of all possible forms of socialism.  As the economy turns down, the tax revenue streams will go dry, leaving all levels of government unable to cut spending and gasping for relief, and one by one, calling for a public bailout.  Bailouts will become the new form of taxation, which is grabbing the revenue in big gobs and charging it to our future livelihoods.
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