But it was exactly the government, not the recordings, that brought about the rupture of the 2008 crisis. Contrary to the imagined, the crisis was due to the fact that the government guaranteed the population deficit through tax money or EDF loans.
Before this policy of credit expansion the banks were not making any mistakes.
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It was not the government that devised the collaterized debt obligations, the various structured investment vehicles, the credit default swaps, and all the other fraudulent financial instruments.
It was not the government that engaged in all the predatory lending and foisted the many liar loans and NINJA loans on borrowers who would never be able to repay them. (Of course, the government did facilitate some of those shady actions, including the repeal of Glass-Steagall.) It was the banks and the mortgage companies that did so.
As for the banks' "not making any mistakes," I might agree with you there. They were too busy engaging in fraud and other criminal activity.
They were making no mistakes. They knew what they were doing, they knew when the shit was about to hit the fan, and they knew they had to cover their asses while making out like bandits.
Someone should have closed the door on those bankster-criminals and their reprehensible activity. Unfortunately, government failed to do that, meaning that the govt is as complicit as the banksters.
The government did nothing of the sort, it just opened the door for all this to happen, injecting real estate credit and securing collateralizations. Before that, if you look at the history of the banks' activities, they were in line with reality. After the government started the credit injection everything went astray.
It's the same thing today in Brazil, where people can not afford to buy a property because the amounts are absurdly expensive and many people are failing to pay their debts due to the facilitated credit that the government gave the population.
None of this would have happened had the government not intervened in the free market.
Hmmm, the overall thesis of your post is that the govt "always closes doors." And yet here in your comment you state that the govt "just opened the door" – implying that the govt is solely responsible for the 2008 crash and "all this to happen," because it allowed the fraud and chicanery to happen.
And if – as you say – the govt "just opened the door," then your reasoning falls flat. That implies that the lauded free market was allowed to do all its grand and noble work, and lead us to financial utopia. It didn't. In fact, it destroyed economies and countries.
As for looking at the history, I've already done that. Over the past decade or so, I've read 100 or more books (and thousands of articles) about the recent crashes (1997-98, 2000-01, 2008), as well as about the various economic trends leading to and causing the crashes.
To assume that the government caused the crashes by its interference in the free market is ludicrous. As stated very clearly in the first 2 paragraphs of my above comment, it was the banks and mortgage lenders and various other corporations. That's an undeniable fact, supported by empirical evidence.
The government closes the doors to new technologies and innovations by creating regulations that are not really necessary at all.
The government "opens the door" to bureaucracy, and bubbles that would not have been possible had it not intervened in the economy. As I said earlier, the banks did what they did because the government simply gave them carte blanche, which would not be done if there had not been the previous government stimulus.
Empirically, the last crises, from 1929 to the crisis of 2008, including this next crisis of credit of the governments, were ALWAYS caused by the governments and their Keynesian method of intervention in the economy. It is not I who say this, only historical facts that demonstrate this.
Here are some examples of what I'm talking about.
https://mises.org/library/crisis-10-points
https://mises.org/library/great-depression
Seriously I love your little convo you're having here @majes.tytyty :)
Seriously I love your little convo you're having here @robertoueti :)