Who's responsible for the Great Recession?

More Than Mortal · November 22, 2014, 12:40:52 PM

This is always a fun topic.

I blame the gub'ment.

Who do you blame, and why?

Alternative Facts · November 22, 2014, 12:42:34 PM

Various groups - the government's policies which directly impacted various financial, banking, and housing sectors across the globe. The problems escalated for roughly twenty years, and then came crashing down.

I could find the mile long post I made debating Kinder on the subject, maybe later.

More Than Mortal · November 22, 2014, 12:44:34 PM

Quote from: IcyWind on November 22, 2014, 12:42:34 PM

The problems escalated for roughly twenty years, and then came crashing down.

I'm not sold on the whole bubble theses, it's too easy to retroactively say "Oh look, a bubble!" Not to mention, a few countries which did go into recession didn't even see a collapse of the housing market.

The markets were signalling poor performance prior to the crash, but - at least in my opinion - the government failed to respond.

Alternative Facts · November 22, 2014, 12:48:38 PM

Quote from: Meta Cognition on November 22, 2014, 12:44:34 PM

Quote from: IcyWind on November 22, 2014, 12:42:34 PM
The problems escalated for roughly twenty years, and then came crashing down.
I'm not sold on the whole bubble theses, it's too easy to retroactively say "Oh look, a bubble!" Not to mention, a few countries which did go into recession didn't even see a collapse of the housing market.

Countries such as? Just curious - their recession likely stemmed from the recession of other countries - not internal problems.

Quote from: Meta Cognition on November 22, 2014, 12:44:34 PM

The markets were signalling poor performance prior to the crash, but - at least in my opinion - the government failed to respond.

Most likely.

BrenMan 94 · November 22, 2014, 12:51:33 PM

Bubbles and debt. Bubbles and debt.

Our economies became reliant on government oversight, and a few years after the market outran the government, everything came crashing down.

More Than Mortal · November 22, 2014, 12:55:34 PM

Quote from: IcyWind on November 22, 2014, 12:48:38 PM

Countries such as? Just curious - their recession likely stemmed from the recession of other countries - not internal problems.

I think Canada and Australia were the notable ones, but I can't find the fucking data at the moment >.>

Flee · November 22, 2014, 12:58:18 PM

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Alternative Facts · November 22, 2014, 12:58:42 PM

Quote from: Meta Cognition on November 22, 2014, 12:55:34 PM

Quote from: IcyWind on November 22, 2014, 12:48:38 PM
Countries such as? Just curious - their recession likely stemmed from the recession of other countries - not internal problems.
I think Canada and Australia were the notable ones, but I can't find the fucking data at the moment >.>

Yeah - both of their recessions likely stemmed from the recessions in other countries, especially Australia.

PSU · November 22, 2014, 01:00:25 PM

Republicans

More Than Mortal · November 22, 2014, 01:01:15 PM

Quote from: Flee on November 22, 2014, 12:58:18 PM

Why the government, Meta?

Monetary policy was incredibly tight, and caused nominal income to tank. The subprime debt crisis certainly would've been a problem in itself, and we'd have experienced a measure of debt deflation and falling money velocity, but nothing on such a tremendous scale.

More Than Mortal · November 22, 2014, 01:03:17 PM

Quote from: IcyWind on November 22, 2014, 12:58:42 PM

Quote from: Meta Cognition on November 22, 2014, 12:55:34 PM
Quote from: IcyWind on November 22, 2014, 12:48:38 PM
Countries such as? Just curious - their recession likely stemmed from the recession of other countries - not internal problems.
I think Canada and Australia were the notable ones, but I can't find the fucking data at the moment >.>

Yeah - both of their recessions likely stemmed from the recessions in other countries, especially Australia.

Actually, if I remember correctly, Australia avoided a recession. But then, that's unsurprising given Australia's usual resilience to shit like this.

Canada also fared very well, too, mostly thanks to Mark Carney who was head of the Bank of Canada.

Spoiler

And who is now head of the Bank of England, suck it yanks!

Alternative Facts · November 22, 2014, 01:05:18 PM

Quote from: Meta Cognition on November 22, 2014, 01:03:17 PM

Quote from: IcyWind on November 22, 2014, 12:58:42 PM
Quote from: Meta Cognition on November 22, 2014, 12:55:34 PM
Quote from: IcyWind on November 22, 2014, 12:48:38 PM
Countries such as? Just curious - their recession likely stemmed from the recession of other countries - not internal problems.
I think Canada and Australia were the notable ones, but I can't find the fucking data at the moment >.>

Yeah - both of their recessions likely stemmed from the recessions in other countries, especially Australia.
Actually, if I remember correctly, Australia avoided a recession. But then, that's unsurprising given Australia's usual resilience to shit like this.

Canada also fared very well, too, mostly thanks to Mark Carney who was head of the Bank of Canada.

Spoiler
And who is now head of the Bank of England, suck it yanks!

Yeah, I was just gonna say. Here's some GDP numbers from 2009 - not the best indication, but countries in brown were countries in recession:

Canada had a minor hit, comparable to the US, but Australia actually saw growth. Not sure how the numbers look for 2010 and beyond.

bang bang · November 23, 2014, 03:57:19 AM

Mix of the government and the business cycle. There's a slight economic decline every few years (along with heights); some are bigger than others of course.

Dustin · November 23, 2014, 12:13:00 PM

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More Than Mortal · November 23, 2014, 12:15:15 PM

Quote from: Dustin Patty Cake on November 23, 2014, 12:13:00 PM

Recessions aren't controllable. They happen... well naturally almost.

Of course they're controllable. It must have some sort of endogenous cause.

Recessions will always happen, sure, but there's no reason they have to be so fucking severe.

Dustin · November 23, 2014, 12:16:57 PM

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More Than Mortal · November 23, 2014, 12:19:44 PM

Quote from: Dustin Patty Cake on November 23, 2014, 12:16:57 PM

It was a housing bubble, and houses are the largest asset for every home-owning individual. Of course it's going to be severe.

Except that simply isn't true.

Financial crises have never been enough to push a country into recession. Most countries, IIRC, didn't even experience a bubble, prices just plateaued. Not to mention, the stock market crash of 1987 had similar levels of bad debt to 1929, yet nothing even comparable to the Depression or the Recession followed.

Lemy the Lizerd · November 23, 2014, 12:23:32 PM

Dustin · November 23, 2014, 12:25:17 PM

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More Than Mortal · November 23, 2014, 12:27:27 PM

Quote from: Dustin Patty Cake on November 23, 2014, 12:25:17 PM

When has the US or the UK ever not been in debt?

What does that have to do with anything?

The point is that a negative demand shock is pretty much guaranteed to be caused by bad monetary policy, and then exacerbate any debt issues. Don't get me wrong, the subprime crisis would've happened, but Lehman Brothers didn't fail until the U.S. had already been in a recession for about eight months.