Posted 5 years ago on Oct. 11, 2011, 6:42 p.m. EST by reverandmaynard
from Asheville, NC
This content is user submitted and not an official statement
I feel that, as always, the truth and the solution lie somewhere in the middle. There is a lot of name calling and shouting going on between both sides.
On the one hand, you have protests that proclaim to be for equality and anti-greed, railing against perceived corporate greed and the "one percent" that control most of American wealth.
On the other hand, you have non protesters who view this protest as an anti-capitalist (and in some cases, a pro-socialism) movement.
There is a problem in America, but the problem does not lie with the 1% "uber wealthy". The problem lies with our government not properly regulating commerce and trade on many levels.
This whole fiasco began with the crash of the housing market. So many banks that were "too big to fail" were heavily invested in mortgage backed securities that became either heavily de-valued or flat out worthless when the housing market fell. Because of this heavy investment, many banks either took a major hit on their balance sheets. In some cases, banks actually failed because of this.
This string of heavy losses on balance sheets and failure of large banks shook our overall confidence in our financial system and in our credit markets, constricting flow on capital that many small and medium businesses rely on for day to day operations.
This constriction on the flow of business capital is a primary reason why so many businesses had lay-offs and are reluctant to hire even today. It's not helping that Europe is facing a similar crisis with their banking system and, with our modern intertwined global economy, any major failures in Europe would send a shock wave through the global economy.
The catalyst behind all this was the crash in the housing market. You could make the argument that greed caused housing prices to become so overvalued that a crash was imminent. This is true. It's also true that if the banks hadn't been so heavily invested in mortgage backed securities they wouldn't have been so negatively affected by the housing crash.
What you can say for certainty is that if we had proper regulations in place to prevent housing prices from becoming so over-inflated in the first place (a price ceiling), or if we had regulations in place to prevent banks from investing in obscure and abstract securities (such as those tied to the valuation of home mortgages) then none of this would have happened.
As they say, hindsight is 20/20. The moral of the story? Our system, while flawed, is still the best system in the world. One of the beautiful things about our system, though, is that it can be changed. A few regulations here and there will keep this problem from surfacing in the future.