I'm in Berlin now and it appears the Germans feel these so called bailouts are rescuing countries that don't have their affairs in order. I think these bailouts are mostly to prop up German and French banks. Banks in Europe and the U.S. have finally figured a way to socialize their losses and privatize their gains. Big bonuses are still the norm at American banks even though it was their bad bets that led the U.S. to its current economic mess.
"Big bonuses are still the norm at American banks even though it was their bad bets that led the U.S. to its current economic mess."
I agree wholeheartedly, but there are _so_ many people who readily (and hastily) blame "dumb and poor" people who shouldn't have gotten mortgages, Fannie and Freddie (US loan guarantors) who backed those mortgages, and one rogue liberal US representative (Barney Frank) who somehow bullied the entire 500-member legislative branch and then President Bush into allowing more mortgages to be handed out to poor people, thus causing the worldwide financial crisis.
Seriously, that's what people actually believe. What can be done to convince them that it's way, WAY more complicated than that?
Barney Frank and a large cohort of liberal representatives fought tooth and nail against Bush's efforts to more strongly regulate Fannie/Freddie, but that's a separate matter. All Bush wanted was more strict regulations of their risks, mainly interest rate risk. All mainstream politicians were (and still are) in favor of inflating the bubble by subsidizing home ownership.
Yeah, it's hard to convince people that the CRA was not responsible for the real estate collapse. There were property bubbles in Spain, Ireland, Britain, etc. The CRA was responsible for those, obviously.
It's easy and natural for one to want to collapse a complicated issue into something manageable and understandable. Even if there is no evidence for it.
Holding interest rates artificially low, and very favorable tax treatment for real estate investments and gains, clearly added a lot of air to the bubble.
