Any time private enterprise screws something up, through their innate orientation to stupidity and greed, we must find Libbbrrrralll Meddleing to blame!
Ford GM and Chrysler are on the ropes because of the EPA and CAFE standards!
The mortgage crises was caused by the Community reinvestment act requireing fly by night banks to actually invest in their communities by writing local mortgages instead of speculating in pork belly futures in Khualla Lampuur.
An explanation of why this right wing appologia is a bunch of crap
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A Mortgage Broker who follows Fannie Mae and Freddy Mac rules is safe. Just because these two agencies could not "keep up" does not justify their poor oversight.
The concept of "bundling mortgages" began at least in the 1990s by Freddy Mac and Fannie Mae. My landlord owned some of those "securities" in the 1990s.
The Democrats and Republicans both fought tightening regulation of Freddy Mac and Fannie Mae in 2004. There are pretty damning videos of Democrats who took a lot of money from Freddie Mac and Fannie Mae resisting imposition of new regs in 2004.
http://uk.youtube.com/watch?v=_MGT_cSi7Rs
Former President Clinton's comments on how "Democrats fought tightening up standards" at the end of the video are quite illuminating.
Among the top 3 recipients of campaign funds from the two FMs was Chris Dodd, and Barack Obama.
Sarbanes-Oxley did not apply to Freddy Mac or Fannie Mae. How come?
Were some Mortgage Brokers playing it fast and loose? Probably. Were they all playing it faster and loser than Freddy Mac and Fannie Mae? Doubt it.
As for CAFE and the EPA - they did not cause as much trouble as the UAW's insane pension demands or the Wharton/Harvard gang who sorta ran the Big Three. Both wallowed in complacency and entitled thinking. The concept of the "Job Bank" is emblematic of this kind of "thinking", paying people to sit around and read newspapers? Insane.
It's not American labor per sae - though even there the UAW doesn't come out looking good.
Toyota, Honda or Nissan do not make their small high fuel economy vehicles in the US. Hyundai comes closest with the Sonata, which is made in Texas with high amounts of automation and no UAW. Most of the other vehicles are larger or more complex and thus command the price premiums needed for US labor.
Expecting GM to do so is irrational and ignores the realities of US labor rates.
There are many regulatory inputs into the mix besides CAFE averages. The EPA continuously tightens pollution regulations - the highly efficient cars like the 1990s era GEO are illegal to make today. They lack sufficient crash test standards and pollute far too much.
We have tighter sulfur content in diesel engines than in gasoline, by a factor of five. All diesel fuel today must be 5ppm sulfur content, whether it needs to be or not. Meanwhile Gasolines can be up to 80 ppm sulfur.
It's crazy to mandate that every car made in the US must be able to function in the LA Basin. The California CARB is far too influential, but Environmentalists insist that we all be "uniform". Someone has to pay for this in increased costs and reduced gas efficiency.
We're not talking free enterprise here.
The cause of the decline of the US Auto Industry is separate from the "Banking Crisis".
Neither situation is necessarily a problem with "capitalism", given the huge amounts of oversight in the banking industry on both State and Federal levels. One can say that the mortgage industry is "unregulated", but why should they clamp down while Freddy Mac and Fannie Mae were allowed to run wild?
There are numerous controls on Cars with respect to emissions, safety and product liability.
You can call it capitalistic if you like but it ain't the free market. Hardly.
As we'll discover next year when the Democrats finish Demagoguing and have to do something. Talk is easy, but dealing with the consequences of their rhetoric, not so easy.
Bill
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