1. Agree
2. Agree – But I put most of the blame on our Government. Had Clinton and Bush not used the HUD to give the CRA of 1977 teeth and terrorize the banks into loaning to those they knew could not pay it back, and THEN provide a way for the banks to unload that risk to the taxpayer by selling the loans to the government through the FHA, the banks would not have made those risky loans on their own. It took our Government first to force the banks to make those loans, “or else” and then provide them a means to unload the risk. If the option to run up these home prices had existed before, why had the banks not done it before? Because the games our Government played to create “affordable” housing only started recently with the drum beat of Barney Frank, Clinton supporting it and Bush continuing it. So, as much as the banks and Wall Street were part of the problem, our Government is to blame for opening the door, in the name of “affordability” which like most Government programs and Political “good ideas” create the exact opposite.
3. Agree. More to it, but yes.
4. I don’t know enough about this to comment. I know Dubai went on a massive building spree and overbuilt, much like most of the world and I agree that it was malinvestment, much like most of the world, which diverted limited resources away from higher value projects to lower value ones because money was too cheap from low interest rates, but how much of what went on in Dubai specifically affected us, I don’t know.
5. Disagree. I’ve been doing research for a post I will do on the Oil Companies soon, but in a nutshell, oil is a commodity like air and water. It’s pretty much the same regardless of where you get it. Without specialization, there is no way to raise the price. Oil is sold on the world market, so all countries show up to the marketplace with their oil and everybody buys from whoever is cheaper. It’s like going to the Farmer’s Market and there are a dozen farmers all selling fresh tomatoes. All you care about is who is selling it cheaper. And since all oil is bought and sold in USD because we are the reserve currency, the exchange rate is not a factor (India and China aside that have recently started trading oil in gold because they hate using our garbage USD). Since America is the 4th largest oil producing country and Exxon is the 16th largest producing oil company, they don’t have enough weight in the market to manipulate the price of oil. In fact the top three oil producing countries produce 4X more oil than we do and when you look at Exxon’s production volume against the top 15 oil producing companies, it’s almost insignificant.

So the farmer with the 16th largest farm in the county raising his tomato prices at the farmers market, is just going to drive everyone over to the tents of the other 15 farmers. Then if you look at how much it costs to create just ONE oil rig, $3B+, and all the R&D expenses that go into new drilling and platform technologies, the oil companies have large profits in absolute dollar terms but when you consider what it costs to drill for oil, it’s really not that much, since most of it gets plowed back into platforms, R&D and all their associated overhead. Add to that the fact that their profits range only between 6% and 11% of their revenues, I don’t think that is sufficient profit to condemn them. Even at 25% or more I’d have a hard time caring about it. I want them to make profits so they can drill for more oil, create newer and cleaner ways to do it, all so we can be less dependent on foreign oil. We should be applauding them for higher profits, not condemning them. As for the price of gas, we can blame that on The Fed, since their suppression of interest rates is inflating the dollar, which inflates the cost of everything, cereal, Big Macs, carpet cleaner, and gas, just like everything else.

I do agree that we have Corporatism, where Corporations are in bed with the Politicians, trading support for various politicians in various ways (donations, stock-tips, news coverage, etc…) in exchange for favors (protectionism, reduced regulation, etc…). But again, that blame rests entirely at the feet of our own Government. It is our Government that accepts the bribes and exchanges them for protection. If the Government stopped being corrupt, the Corporations would have nowhere to turn to for the protection and would have to compete with each other in an open and fair-market playing field. The company that does NOT play this game, will quickly find themselves losing market share and eventually going out of business. So who is to blame for the accident if a parent gives their drunk teen the car keys? The teen for driving drunk or the parent for giving them the keys? Our Corporatism is no different, where Government dangles the keys in front of our Corporations, and they grab them before someone else does. The only difference is that there are a lot of keys up for grabs so all of our economic “accidents” start with BIG GOVERNMENT and all their keys.

#1 Military spending. The old adage that War is good for the economy is simply not true. The section of the economy that produces weapons is small and doesn’t interact much with the rest of the economy. Therefore it draws money away from other sectors. The Bush administration spent half of our gross national product on wars, a nasty habit that the Obama administration has chosen to continue…

#2 Over inflated housing market. Big investors blinded by greed and run by computers poured billions of dollars, into over inflated housing markets. You need not be a rocket scientist to figure out that in a market like southern California when housing prices rise 400% in a few short years that the bottom will dropout, but a computer doesn’t understand the concept of something that is too good to be true. So of course when did drop out, the computers didn’t see it coming, and those holding the paper took the beating.

#3 Credit card economy. Sometime late in the twentieth century, it occurred to some economists that you could spur economic growth by selling things on credit. So somehow it got to the point in the 1990′s where you could get credit cards for your kids, your dog, companies that don’t really exist. In the end, at 25% interest is like paying double for everything you charge, and at some point in debt far enough that it will take forever to pay it back.

#4 International investment drain. Dubai Launched a huge growth in the luxury housing market, one that could only be afforded by millionaires. This adventure attracted a large portion of the international investment funds and in the long run will be doomed because there isn’t enough Millionaires world wide to buy up all this property. Even so the greed factor has sent billions of dollars off to Dubai where no one lives, pulling that money from real projects that would help promote the global economy.

#5 Which leaves just one more little problem, Gas and Oil companies. Exxon Mobile has posted record profits of over 8 billion dollars a quarter every quarter since the beginning of the recession. How did the oil companies make so much money while the economy falls apart? Easy they caused it, while peoples paychecks were shrinking they raised prices of gas to record levels blaming foriegn oil suppliers. Near half of the oil used in this country is produced in this country, they gave no raises, had no production cost increases, yet raised the price of gas 200%. Notwithstanding, billions of gallons of gas held in reserve, which was purchased and produced at lower rates. Their excuse a perversion of supply and demand, if you use more we must charge more and oil costs abroad. Transportation of goods is a major cost factor, by raising gas prices, so high they pushed the cost of all consumer goods and products, at every single point in the supply chain. Thereby creating the largest driving force in the collapse of our economy and made a trillion dollars in doing so. A small fuss was raised, yet in the end nothing was done about this gross rip off of the American peoples. Why? Because the oil companies own Congress. What can be done?

So what happens when a country or a world puts too many eggs in one economic basket? The basket either overflows, or tips over and in the end, you have a mess to clean up.
Ronald E Gascon write in candidate for US President
http://webstation19.8k.com/jonpol.htm