That video is excellent!
I'm would like to offer a word of caution about the "forsaken" phenomena which the video point mentions. Disclaimer: I am not an expert and not amazingly well informed here (although I am somewhat well informed). But from what I've been reading, I get the impression that homeowners with good credit are not defaulting in large numbers yet.
My inexpert prediction is that housing prices are going to continue to fall for a while but will more likely then not stabilize before defaults on good mortgages become widespread, especially if national governments can create effective programs to encourage re-financing of good mortgages and/or restore lender confidence before such a vicious cycle begins. Hopefully such programs will be created in the US and other nations with mortgage crises. The US probably wouldn't be the first to reach this point, so you can imagine how smaller nations with bad markets might become the "miners canary" collapsing into "forsaking" before it happens in the US. It's really hard to predict who's going to go first, given not only the economic but political complexity. But I'd guesstimate Iceland followed by Ireland are probably the scariest two cases. If they go, the US should take VERY aggressive action or expect to go next. And if forsaking becomes widespread in the US, Western Europe would need to pull out all stops and even Japan could follow.
Also, keep in mind that the mortgage crises was the straw that broke the camels back. It was a very big straw, but it didn't cause the current global recession on it's own. In fact a recession started before the crises was huge, back in the first half of 2007. If the mortgage crises were magically solved tomorrow, there would be many other problems.
Anywho...
While Strife is correct in pointing out that many parties are to blame, I want to give a clear warning that raising tarrifs, especially tarrifs on Chinese goods is a very, very, very, very, very, very, very, very bad idea.
Why? Two words: Smoot-Hawley.
Feel free to trust this advice or ignore it. But economists on both the right and the left will agree that free trade is, in simple terms, good. This is because protectionism is, in simple terms, short sighted.
Keep in mind, free trade w/ china doesn't just mean Chinese workers are taking jobs away from American (or European, or Japanese, etc.) workers. It also means that cheap goods from China are helping the American economy grow. This will eventually help the American labor market. So the general theory is that although SOME American and Chinese workers get screwed over by the new trade, the NET effect for American workers is positive and the NET effect for Chinese workers is heavily positive. Free trade has problems, yes. But even as a non-expert I can virtually guarantee that resorting to protectionist tariffs, even "moral" ones, would be economic suicide. While the reasons against protectionism is a little hard to understand and counter-intuitive, please be warned that it can do a lot of harm.
Remember, legions of economists lobbied against the Smoot-Hawley tariffs, predicting disaster. In spite of these warnings, the tariffs were passed with popular public support. Looking back, the consensus is that the Smoot-Hawley tariffs hurt and they hurt a lot.
While there are obviously more factors in play, please note that unemployment jumped from about 8% to 25% before and after the Smoot-Hawley tariffs. And the global economy is a LOT more dependent on international trade these days...
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Topic: About greedy bankers and carmakers (Read 4904 times)