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The Real Cost of the 2008 Financial Crisis

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Re: The Real Cost of the 2008 Financial Crisis

#61

Post by compcoffee »

brobdingnagians wrote: post #3
nafey wrote: post #2

But what was the alternative to the bailouts? Another depression? I feel we made it across fairly well.

We haven't escaped the depression; the bailouts and quantitative easing simply delayed it for a bit, and the more it is delayed, the worse it will be. It would be far better to have economic corrections along the way with little dips than to keep the house of cards going on worse and worse foundations until it all falls apart in a large depression. Little distortions can be corrected in the short term, but keeping th…

>We haven't escaped the depression; the bailouts and quantitative easing simply delayed it for a bit, and the more it is delayed, the worse it will be.

It's this mentality which is going to cost you in the long run. People have been saying "the next one is around the corner" for 10 years, and missed the biggest bull run in history. If you bought prior to the Lehman collapse you'd still be up 130%.

>Even if the government had simply paid off everyones' mortgages, it would be better for the average person

I disagree. I'm not going to pay the mortgage for someone else because someone decided they needed way more house than they could afford.

Re: The Real Cost of the 2008 Financial Crisis

#62

Post by nicktelford »

m_st wrote: post #54
nicktelford wrote: post #39

While a generally fascinating piece that connects together the events in the American and European financial and political systems, it shouldn't be understated how much of an effect the refugee crisis is having on European politics, which can be attributed largely to the "Arab Spring"; itself largely a consequence of the 2008 financial crisis.

Could you elaborate the link of the Arab Spring to the 2008 financial crisis? I can't think of a link and neither does the English Wikipedia article.

Here's a piece on the wider subject: https://fpif.org/the_economics_of_the_arab_spring/

It doesn't directly make the connection, but it does allude to it:

> The recent global financial, food, and energy crises accentuated the failure of economic liberalization to adequately spread the region’s wealth. Significant declines in the tourism, financial, and real estate sectors due to the financial crisis crippled the few well-functioning economic engines.

In other words: these already economically and politically unstable nations were tipped over the edge by the shockwaves of the global financial crisis.

I also wonder whether the impact of a decline in tourism is being understated; both Tunisia and Egypt are/were tremendously popular holiday destinations among Europeans, and with the rise in austerity, I can easily imagine a decline in this tourism causing economic problems in those nations.

Re: The Real Cost of the 2008 Financial Crisis

#63

Post by gassius »

Lazeb wrote: post #44
tonyedgecombe wrote: post #29

Earlier quoted context omitted.

The trouble with revolutions is you end up with a new set of leaders, who may well be worse than what you have now.

If your life is poor, you don't have much left to lose

Venezuela disagree with you, wholeheartedly

You can (especially in US) lose a looooot more.

Re: The Real Cost of the 2008 Financial Crisis

#64

Post by crispyambulance »

koolba wrote: post #35
tokyodude wrote: post #20

Earlier quoted context omitted.

I haven't a clue about the whether the bailouts were important or not. What I feel like I would have liked is for the bailouts to happen AND the top 20 to 100 people from every financial institution to have gone to prison for at least 10 years. The president of Goldman Sachs, the president (or ex-President) of Lehman, etc... etc... What it seems like from the outside is they screwed the world over and completely got…

What crime did each of those executives commit? That’s what needs to be answered. Otherwise your comment reads like a mob chanting “ We want blood! ” Being greedy is not a crime. Taking advantage of lax regulations is not a crime. Being bailed out with tax dollars for risks that paid you off privately if they won is not a crime.

I see this sentiment fairly regularly on HN. It's the idea that laws can sufficiently encapsulate ethical behavior (the rules) when they're strictly enforced, that they're the best thing we got, so live with it.

But there are many behaviors which aren't "crimes" but which are morally repulsive.

The danger of not reacting, one way or another, to such inequities is that people lose faith in the system. Already, the election of Trump and rise of fascist sentiments everywhere are like a giant "fuck you" to politics as usual.

It can get much worse. At some point, as one billionaire said, "the pitchforks are coming". I don't think we'll be able to avoid it the way things are going.

Re: The Real Cost of the 2008 Financial Crisis

#65

Post by compcoffee »

jondubois wrote: post #16
brobdingnagians wrote: post #3

Earlier quoted context omitted.

We haven't escaped the depression; the bailouts and quantitative easing simply delayed it for a bit, and the more it is delayed, the worse it will be. It would be far better to have economic corrections along the way with little dips than to keep the house of cards going on worse and worse foundations until it all falls apart in a large depression. Little distortions can be corrected in the short term, but keeping th…

Agreed, by delaying crashes, the problems pile up and they compound. You're not allowing the population to update their skills and targets to meet real economic needs because reality has been distorted by the bailouts. For example, maybe one reason for the crash is that the economy couldn't support so many people working in finance. Because of the bailouts however, it's now probably more lucrative than ever to work i…

>Agreed, by delaying crashes

Uh, what crash was delayed? 2008 was the worst since the Great Depression.

>Because of the bailouts however, it's now probably more lucrative than ever to work in finance

This is simply incorrect.

>so we probably have even more people working in finance today than in 2008

We have slightly more now than 12 years ago. Why would we not?

Re: The Real Cost of the 2008 Financial Crisis

#66

Post by netsharc »

nicktelford wrote: post #39

While a generally fascinating piece that connects together the events in the American and European financial and political systems, it shouldn't be understated how much of an effect the refugee crisis is having on European politics, which can be attributed largely to the "Arab Spring"; itself largely a consequence of the 2008 financial crisis.

I can't help but believe that if the common folk of Europe of the last, say 10 years, was doing economically better, they would have been more generous with people fleeing warzones looking for help...

Re: The Real Cost of the 2008 Financial Crisis

#67

Post by corv »

nicktelford wrote: post #62
m_st wrote: post #54

Earlier quoted context omitted.

Could you elaborate the link of the Arab Spring to the 2008 financial crisis? I can't think of a link and neither does the English Wikipedia article.

Here's a piece on the wider subject: https://fpif.org/the_economics_of_the_arab_spring/ It doesn't directly make the connection, but it does allude to it: > The recent global financial, food, and energy crises accentuated the failure of economic liberalization to adequately spread the region’s wealth. Significant declines in the tourism, financial, and real estate sectors due to the financial crisis crippled the few…

The decline in tourism was a direct result of destabilizing the Middle East and North Africa due to wars and the resulting increase of terrorism.

Re: The Real Cost of the 2008 Financial Crisis

#68

Post by bitxbit »

I experienced the financial crisis first hand on Wall Street, a place fraught with people who pretended to know the ins and outs of risks. It was also a brutally honest place when it came to winners and losers. But that changed when Hank Paulson, then the Secretary of Treasury, knelt down on camera and begged Nancy Pelosi for what was effectively a blank check. Wall Street could not face reality when it was its turn to be the loser. I believe the real cost of 2008 is moral hazard. They destroyed the fundamental values of capitalism and I can't help but feel that we are all still pretending.

Re: The Real Cost of the 2008 Financial Crisis

#69

Post by annabellish »

compcoffee wrote: post #59
andrepd wrote: post #41

Earlier quoted context omitted.

The bailouts are controversial, but it's the bailouts AND the complete absence of criminal responsibility that's inexcusable. It is well known and documented that the financial crisis was no accident; everybody who headed the financial services industry to the state it was in did so knowingly , knowing full well the inevitable consequences, but not giving a damn because the arrangement let them to become handsomely w…

> Then while we (working class) were dealing with the fallout On the ground, parts of the financial services and the "working class" were responsible. This story that it was simply a bunch of innocent people trying to fulfill the American Dream of owning a home is hogwash. People were knowingly buying property beyond what they could afford because prices would "always go up" and they could flip it to a greater fool.…

I really feel like this is just victim blaming. When financial advisors are telling people they can afford something because prices will always go up and will give them those loans, working out a payment plan they say that is affordable, how on _earth_ is it the fault of the people who believed financial experts on financial matters?

Re: The Real Cost of the 2008 Financial Crisis

#70

Post by ThomPete »

The best explanation I have heard of the financial crisis was in the book "The End of Alchemy: Money, Banking and the Future of the Global Economy" by the former head of Bank of England.

It makes the convincing case that there is no real single place to point fingers and that the crash was the logical consequence of people all doing the "right thing"

I can highly recommend it as it also takes a historical view of money and what it is and how it's been used historically. A very interesting book.

So yeah there is a real cost of 2008 but there is also real opportunities. These things can't be measured until decades later.

However, the anti establishment movement didn't rise because of the financial crisis it rose because of globalization and the alliance between politicians and large international organizations to take away opportunities from its own citizens and start giving it to countries like China after the fall of Soviet Union. Mixed with that and the liberal social welfare system in Europe and PC culture which claimed any critical voice was facist, racist etc. That's why the antiestablishment came about not because of 2008 and wallstreet.

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