Economists: Another Financial Crisis on the Way: Nobel Winners Call for Stronger Financial Reforms

[depakid]

Source: ABC News

Even as many Americans still struggle to recover from the country's worst economic downturn since the Great Depression, another crisis -- one that will be even worse than the current one -- is looming, according to a new report from a group of leading economists, financiers, and former federal regulators.

In the report, the panel, that includes Rob Johnson of the United Nations Commission of Experts on Finance and bailout watchdog Elizabeth Warren, warns that financial regulatory reform measures proposed by the Obama administration and Congress must be beefed up to prevent banks from continuing to engage in high risk investing that precipitated the near collapse of the U.S. economy in 2008.

The report warns that the country is now immersed in a "doomsday cycle" wherein banks use borrowed money to take massive risks in an attempt to pay big dividends to shareholders and big bonuses to management -- and when the risks go wrong, the banks receive taxpayer bailouts from the government. "Risk-taking at banks," the report cautions, "will soon be larger than ever."

Without more stringent reforms, "another crisis -- a bigger crisis that weakens both our financial sector and our larger economy -- is more than predictable, it is inevitable," Johnson says in the report, commissioned by the nonpartisan Roosevelt Institute. The institute's chief economist, Nobel Prize-winner Joseph Stiglitz, calls the report "an important point of departure for a debate on where we are on the road to regulatory reform."

Read more: http://www.commondreams.org/headline/2010/03/03-0

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If or when the next collapse happens, it will be laid at the feet of the Democrats for failing to hold banskters and fraudsters accountable and enact responsible and effective reforms.

[HeresyLives]

1. It's not another one, it's the same one as before.

Obama bought time, that's all.

[HughBeaumont]

2. Casino businessin' is why this happened, English.

Risk shiftin', wealth-hoardin', band-aidin', kickin' th' can, tax-cuttin', war-spendin', corporate welfarin', boom-bubble-crashin', idiot votin' . . .

The USA isn't the goddamned Mohegan Sun.

[HeresyLives]

3. Not why it happened, just what was exposed when it did.

Or as Warren Buffett said: "Only when the tide goes out do you discover who's been swimming naked."

[HughBeaumont]

13. Casino Businessin' is WHY it happened.

What "exposure"? It was blatantly zero-sum, faith-based maneuvering by the wealthy and the paid-for government that abetted their upward transfer of wealth we've been seeing for decades.

Let me give you an example: "Sure, job offshoring is painful for the workers in the short term. But it's a win-win for them in the long run, because higher paying jobs will result ON shore from it. Trust us, we know what we're talking about."

Let me give you another: "Cutting taxes on the wealthy frees up capital. Then they'll expand and hire workers here. Trust us, we know what we're talking about."

:eyes:

[onethatcares]

4. no shit sherlock,

hell, we gave the banks billions, oops, loaned the banks billions at no interest, they in turn took our (the taxpayers)money and bought treasury bonds paying whatever interest rate available. Thereby, making money off of money that cost them nothing to obtain.

something is very wrong with that picture.

[fascisthunter]

5. Gee... Michael Moore is right AGAIN?!

Oh my... people might start to listen to him... quick righties, spread more garbage about him, quick!

[Hell Hath No Fury]

6. "...righties"? Heck --

the BOGers right here tap danced all over Moore's face for pointing out what the smart people know. :shrug:

[depakid]

7. BOGers?

:shrug:

[santamargarita]

8. This time I hope all of the Wall Street fucks jump out the window

It will be their fault, again!

[ixion]

9. "That, Mr. Anderson, is the sound... of inevitability"

-- Agent Smith, The Matrix.

[Xolodno]

10. Whats really scary.....

...what if we come out of this current crisis with a sudden roar due to the Banks taking big risks. Everyone making money and feeling complacent. And wall street spinning harder than a European DJ in Ibiza that no regulations is what helped get us out of the last jam so fast....all we had to do was "experience a little bit of pain for a year or two".

Since the vast majority do not have much an economics background (and that includes wall street exec's and analyst...they threw the economists out a long time ago when they didn't give them the opinion they wanted to hear), they will buy it hook line and sinker.

You can't just keep borrowing and spending your way out of it. That method should be the last resort and only used in times of deep crisis (like right now). But after you do it, be sure you hurry up (even at the expense of some economic pain and sacrifices) and pay it off to an acceptable level and make sure what caused it doesn't happen again.

If you don't, eventually no one will let you borrow and your choices are go into an economic depression with the government powerless to do anything. Or drop all economic treaties and just start printing money. Of course if you do the latter, watch how quickly overseas assets get seized and nations stop exporting to the US. The standard of living will skydive without a parachute, inflation will rise faster than any rocket that can be made and the whole economic structure of the US will have to massively shift. The pain won't be much different from a depression...only the economy will be "growing" but it will be a false growth as inflation will be hiding whats really going on.

[MadHound]

11. What you call a crisis our corporate masters call an opportunity

An opportunity to transfer more wealth from the bottom to the top. And it doesn't matter who is in office, this is what is going to happen.

With both parties beholden to their corporate masters we the people can get no relief from either party. So where does that leave us?

Oh, yeah. That's right.

Think about it.

[taught_me_patience]

12. If we can't get meaningful financial reform

after the worst banking disaster since the great depression, then Obama is a complete failure and we really have no hope for the future.