[BishopMVP]

Originally Posted by st.cronin

John Maynard Keynes ftw?

In the sense that's who politicians will be looking to, yes. In the sense that Free-Market principles of the Friedman variety failed, no. Free market principles are predicated on there being risk and occasional backsliding, but with the acknowledgment that the short-term pain is made up for by long run gain. For example, if the economy tripled from 100d to 300d in the last 20 years, then backslides to 250d based off the creative destruction phase, that's still a gain of 150% over 20 years, a phenomenal growth rate. Just because politicians and laymen are pussies looking only at short-term solutions who can't predict or accept the inevitable temporary downturns doesn't refute the original free-market ideas.

Now, there's clearly a debate between generally Keynesian vs. Freidman-esque economic theory, but even if it could be unquestionably proven Friedman-style economics were better long-term, advocating Keynesian policy would still be a winning political strategy because most people value stability over long-term gain.

Originally Posted by Edward64

Your position is A caused Z, and there is nothing inbetween that could have mitigated it. I disagree with this. I cannot think of any situation that could not be mitigated to some extent.

My position is A, B, C caused Z, but there were many steps inbetween D-Y that could have mitigated the situation and maybe caused a small z. Mitigation = lessen, not prevent.

Not quite. My position is Greenspan was there for steps A thru T, Snow in there for U, and Paulson for V-Y leading to Z. Paulson clearly could have mitigated the situation*, but I fail to see how a plurality of blame falls on his shoulders compared to Greenspan's.

*(You're also taking the odd position that Paulson's moves haven't mitigated the problem. Since no one really knows how bad this could have gotten, and the consensus is much, much, worse, up to a collapse of major banks in the US and a run on US currency, we clearly haven't ended up with a worse-case scenario.)

Again, don't claim to be an economist or a financial person but as a consultant who is used to dealing with issues and resolving them (obviously at a much smaller scale), I cannot absolve Paulson and Bernanke who was on watch between M-Y when the issue came to a head.

1. I see (or should have seen) problem coming.
2. I am empowered but what I do is ineffective to either eliminate or mitigate.
3. I am accountable for the problem

OK, let's install you as CEO of a bank with $200b in assets and $100b in bad loans due in a month. You can see it coming, you are empowered to act and it comes due on your watch. Are you really accountable for the problem? No, you're not.

Or because this is a football forum, Washington fires Ty Willingham and hires you. You've got a game with USC coming up in a month. Bottom line, you're gonna get smoked, but you're not accountable. If you lose 98-0, you are accountable for the extra 49 points scored, but to bring it back full circle, what has Paulson done to exacerbate the crisis?