What isn't noticed is that OECD average income for doctors is 50% of what it is in the US. Doctor payments are the largest part of the health care bill.
So you can cut costs in socialized health care systems, just cut doctor pay (and nurse, etc.) This is, infact, basically what Medicare does and is why many high-quality US doctors refuse Medicare patients.
Once the US goes to a socialized system with doctor pay controls, the world can really control costs because the best doctors will no longer have a financial incentive to move to the US to make more money - then you can really tighten the screws on them at home!;)
I agree - GREENSPAN screwed up. It was under Greenspan that the whole "accelerating economy" and change in how we managed economic bubbles happened.
Well you may remember what happened in 1928 when the Federal Reserve did try to "pop the bubble" of the stock market. I think I'd prefer them to stick to the Taylor Rule, keep their eye on currency stability, and leave the bubble pricking to someone else (the market?)
I don't think there was any "one cause" of the housing bubble, but certainly the way the CRA (combined with the Home Mortgage Disclosure Act, the Equal Credit Opportunity Act, and the Fair Housing Act) were modified and interpreted over time may have encouraged additional "creative underwriting". Here is an excerpt from Closing the Gap: A Guide to Equal Opportunity Lending from the Boston Fed:
"Credit scores. While credit scores can be an analytical tool with conforming loans, their effectiveness is limited with CRA loans. Unfortunately, CRA loans do not fit neatly into the standard credit score framework . . . Do we automatically exclude or severely discount . ..loans [with poor credit scores]? Absolutely not."
I think CRA/HMDA/ECOA/FHA were a minor part of the bubble compared with the GSEs (and Congress pushing them into sub-prime), the mortgage interest deduction, the capital gains reduction on home sales, and good old bubble mentality in the private sector, but it all added up.
Even if Bush did dictate the "price" of gas, he would not dictate its "cost". Price controls lead to shortages, so while a price might be low, the cost of driving around until you find a gas station that still had gas is higher.
Or if Bush gave government money to gas stations to keep their price low, it would "cost" taxpayers.
You can't legislate economies into being (although you can legislate them out of existence).
the US government's chief role is now redistribution of wealth
And if that wealth was truly being redistributed from the well-off to people in poverty that would be one thing, but most of Social Security and Medicare is actually going to people who already are fairly well-off. On the supply side, we also have tax breaks for mortgage interest (how good idea does that seem now?) which don't matter to most people in poverty as well as payroll taxes rolling off around $100K per year.
All these entitlements distort markets without actually achieving much real "redistribution" as leftists would like.
Joe himself would get a tax cut under Obama's plan
People keep saying this, but do you mean he would get a tax cut AFTER the sunset of the Bush tax cut raises his taxes first, or is Obama saying he won't let the Bush tax cuts sunset?
As others have said, this really is a GSM issue and not an iPhone issue.
I used to have a Blackberry (and almost everyone in my company did) and it seemed to be much worse than the iPhone. Unfortunately, I can't offer a scientific reason why.
At every speaking event, someone would come up to the podium with a Blackberry in their pocket, and halfway through their presentation the mics would pick up "RATTA-TAT-TAT RATTA-TAT-TAT" of the RF.
iPhones seem to have to be within closer presence to mics or amplified speakers than Blackberries to be picked up by them.
India's 28 state-owned banks control about 75 percent of loans and deposits, and 29 private banks and 31 foreign banks make up the rest. The government owns nearly all of the approximately 600 rural and cooperative banks and most other financial institutions. Banks must lend to "priority" borrowers. Foreign ownership of banks and insurance companies is restricted.
That's why there is microlending in India, the banking system is almost totally an inefficient government monopoly.
Don't blame the CRA, it only prohibited red-lining (denying a loan based on geographic area rather than individual credit rating), and only applied to banks, not independent mortgage companies.
The Home Mortgage Disclosure Act (HMDA) applied to banks, mortgage companies, and other lenders. Read what the Boston Fed was telling lenders about it...stuff like "Lack of credit history should not be seen as a negative factor...In reviewing past credit problems, lenders should be willing to consider extenuating circumstances. ". There also was the Equal Credit Opportunity Act and the Fair Housing Act.
Don't blame Fannie Mae or Freddie Mac either. They weren't the ones making the loans.
But they did buy or guarantee nearly $400 million of Alt-A and subprime mortgage investments. At a conference in spring 2005, Fannie Mae Executive Vice President Thomas Lund warned about the danger to borrowers, asking, "Are we setting them up for failure?"
Ironically, it was the repeal of the section of the Glass-Steagall Act (passed in response to the depression) which strictly separated banks from securities firms (to help assure the stability of banks) which exacerbated this mess and resulted in such massive failures.
No one has explained to me how this has changed the situation - "unified banks" have actually done a better job recently weathering the storm compared to banks with no investment side or pure investment banks. And they did better during the Great Depression as well. Glass-Steagall came from a war between the Morgans and Rockefellers rather than any actual data.
No honest person can say that government entities or regulations were "the cause" of the recent credit crisis, but certainly many regulations, Congress (in a bipartisan fashion), and the GSEs were on the side of "affordable housing" and "creative underwriting" for political profit, just as much as the private sector was in it for the monetary profit.
Something I've never understood is how the government got the money to pay for the war machines, bombs, and bullets. I mean, you hear all the time how that got us out of the depression, but it just doesn't add up.
"Studies of the development of local economies often point to large-scale World War II military spending as a source of long-term economic growth, even though the spending declined sharply after the demobilization. We examine the longer term impact of the temporary war spending on county economies using a variety of measures of socioeconomic activity: including per capita retail sales, the extent of manufacturing, population growth, the share of women in the work force, housing values and ownership, and per capita savings over the period 1940-1950. We find that in the longer term counties receiving more war spending per capita during the war experienced extensive growth due to increases in population but not intensive growth, as the war spending had very small impacts on per capita measures of economic activity."
So if it wasn't that, what caused the "Great Escape" from the Great Depression?
"In 1945 the death of Roosevelt and the succession of Harry S Truman and his administration completed the shift from a political regime investors perceived as full of uncertainty to one in which they felt much more confident about the security of their private prop- erty rights. Sufficiently sanguine for the first time since 1929, and finally freed from government restraints on private investment for civilian purposes, investors set in motion the postwar investment boom that powered the economy's return to sustained prosperity notwithstanding the drastic reduc- tion of federal government spending from its extraordinarily elevated war- time levels."
You also have to have a holographic "camera", and those are not easy, especially since they require LASER light.
A computer-generated hologram can be built from any 3D mathematical model. The 3D model could be built from from interpolating parallax from stereoscopic image capture.
Practical computer-generated hologram displays will probably be much "simpler" than analog film holograms (fewer virtual views per degree, no horizontal parallax, etc.)
Credit Crisis warnings from 2000-2002
on
Google, Circa 2001
·
· Score: 3, Interesting
This acute supply and demand imbalance led to year over year price increases of 29% in "wine country" and 34% in the Santa Clara region. Elsewhere, prices surged 17% in Orange Country, 19% in Northern California, 21% in the San Diego region, and 34% in Monterey. Clearly, this has developed into a precarious statewide housing bubble. Amazingly, we hear not a word of concern about what is a major systemic risk to the U.S. financial system. And, importantly, the Fed's decision to let the party continue allows the great California real estate bubble to run to even more devastating extremes. Who is minding the store? Most unfortunately, this is a replay of the 80's real estate fiasco but at a much grander scale - actually the proverbial "mountain versus a molehill" applies. Yet, amazingly, no one dare say "enough is enough," and instead the dysfunctional marketplace continues to fund the boom despite the obviousness of the unsound bubble. Massive credit excess feed asset inflation and a major misallocation of resources, as the Fed tinkers with rates. What a fiasco.'
Fannie Mae has a new program out for borrowers with lower credit ratings and the sub-prime industry is taking exception.
The Executive Director of our industry association, NHEMA (link found in our Resources section) was quoted in today's American Bankers as saying "Fannie Mae is expanding its mission into areas where it has virtually no experience, and taxpayers should be prepared for a bailout that could rival our savings and loan experience," and that the association predicts that the program will cost Fannie its biggest losses ever, he said. The outcome, he said, will be that consumers with credit problems will "be back where they were 25 years ago -- no access to mortgages or loans at all, other than loan sharks."'
I'm talking about enforcement of regulations to disallow the "innovation" that created those complex, uber-tranched, MBS-backed securities that were impossible to scrutinize effectively.
You know the Fannie Mae was set up by the government during the New Deal specifically to provide a secondary mortgage market through MBSs, to buy mortgages from banks so that they could have the capital to continue to loan to home borrowers (with the implied backing of the US government). Moreover, the GSEs went on to invent the CMO to provide several tranches of risk so they could more effectively finance the secondary market.
I'm talking about enforcement of regulations to disallow the "innovation" that created those complex, uber-tranched, MBS-backed securities that were impossible to scrutinize effectively. I
Heh, the result would be the same as what I suggested - no one would want to take on the risk of subprime loans without combining them in an instrument with 80% loan-to-value loans.
Computers don't change the intelligence of kids, but they may help their motivation.
While research shows IQ is highly heritable (heritability of IQ between 0.4 and 0.8 in the United States), some of it clearly is not, which may be the key to the Flynn Effect of rises in average IQ in economically developed countries.
It is possible that some of the marginal non-heritable IQ rise is due to exposure to complex and challenging mental stimulation of children. In which case, computers may change the intelligence of kids if they are used in a constructive way.
Almost any marginal gain in IQ is likely to enhance lifetime earnings (though perhaps not as much as we once thought), so it is a good idea to encourage it.
Of course, whether a government-sponsored purchase of lots of computers for children will achieve IQ-enhancing results is a bigger question - the question is how they are used, if at all, and what traditional instruction their use may crowd out.
Of course, the long-term solution is genetic engineering for higher IQ....
So the Framm-Leach-Bliley Financial Services Modernization Act allowed commercial and investment banks to consolidate. So what?
Seems like the non-commercial-bank investment banks (Goldman Sachs and Morgan Stanley) are the ones who screwed up the most and went down biggest, as did the non-commercial-bank GSEs.
Perhaps that regulation change contributed to IndyMac and WaMu going down (I don't know how much they failed because of primary versus secondary market mortgages), but to date very few "universal" commercial banks with investment banking arms have actually gone down. Infact it looks like "universal" bank JP Morgan Chase is about the rescue WaMu, something that would have been impossible before the FSMA.
Now if you were talking about regulation that said "it is illegal to loan someone more than 80% of the value of their house", maybe, just maybe that would have cooled the housing bubble and reduced the risk of subprime default (assuming most people would not have found some way to sneak a loan from their parents or whatever for the 20% downpayment). But then everyone who believes in "affordable housing" would have flipped out.
There was so much return on these subprime loans, that Fannie and Freddie were financially pressured into purchasing up blocks themselves.
You mean Congress pressured the GSEs to take on $1 trillion of Alt-A and subprime loans in the name of "affordable housing" between 2004 and 2007, as the GSEs needed to look good to Congress after their accounting was found to be fraudulent.
The GSEs should have been dissolved long ago, especially once their accounting fraud was revealed. The GSEs were private/public frankensteins whose implicit backing by the government gave them a near duopoly position.
First, I don't think any sane person thinks the government is the "main blame" for the subprime crisis. I feel the "main blame" goes to those who made loans and purchased MBSs/CMOs without an accurate risk model (specifically, what happens if home prices start to go down?). However, the government did make things worse.
80% of the loans which were fully or largely outside CRA jurisdiction
But many were. Specifically, after 1995 changes in the CRA banks were pressured to take low-income CRA loans. Don't take my word for it, read what the Comptroller of the Currency said:
Letter states that financial institutions may receive favorable CRA credit for investing in a middle income housing down-payment assistance program if the investment is a "qualified investment" under the CRA regulation...Interagency CRA letter stating that an investment in an MBS bond that is specifically tailored to an institution's CRA requirements appears to be a "qualified investment" under the CRA regulations...purchases of obligations of certain special purpose vehicles backed by affordable housing mortgages...
You may want to Wikipedia Nationally Recognized Statistical Rating Organization, recognized by the SEC to determine whether securities are "investment quality" or not for regulatory bank and broker-dealer net capital requirements. Years ago people in the investment area started suspecting the NRSROs were screwed up (thus all the Credit Derivative Swap insurance policies), but the SEC didn't do much to reform.
You can blame Bush all you want, but lets also remember Democrats were pushing the GSEs to take on additional alt-A and subprime loans in the name of "affordable housing". They are still talking about bailing out individuals who took out unsustainable loans. I don't think we should bail out Wall Street firms or individuals, lest we reward all of their bad risk taking.
Like all great disasters, there were lots of people and problems contributing to the problem.
What we do know is that the 70,000 pages of new banking regulations published every year did not stop it.
Bryan Caplan's The Myth of the Rational Voter points out that when the average beliefs of voters are consistently wrong in the same direction, these biases do not cancel each other out; they compound.
In particular, it has been proven that the average voter is wrong about economics in a consistently biased way.
Slashdot Mirror
If these whitespace devices are so good at detecting and avoiding interference, why don't we also put them in military, fire, and police whitespace...
What isn't noticed is that OECD average income for doctors is 50% of what it is in the US. Doctor payments are the largest part of the health care bill.
So you can cut costs in socialized health care systems, just cut doctor pay (and nurse, etc.) This is, infact, basically what Medicare does and is why many high-quality US doctors refuse Medicare patients.
Once the US goes to a socialized system with doctor pay controls, the world can really control costs because the best doctors will no longer have a financial incentive to move to the US to make more money - then you can really tighten the screws on them at home! ;)
I read paper when the airplane host forces me to turn off my iPhone during takeoffs and landings (I keep a few "Network Worlds" around for that)
Otherwise, it is LCD all the way!
Another factor which contributed was the Basle-1 and -2 capital adequacy requirements - particularly the latter.
I think when you loose somewhere between $3 trillion and $5 trillion in wealth in an asset bubble burst, the details probably don't matter much.
I agree - GREENSPAN screwed up. It was under Greenspan that the whole "accelerating economy" and change in how we managed economic bubbles happened.
Well you may remember what happened in 1928 when the Federal Reserve did try to "pop the bubble" of the stock market. I think I'd prefer them to stick to the Taylor Rule, keep their eye on currency stability, and leave the bubble pricking to someone else (the market?)
You may want to read this report.
I don't think there was any "one cause" of the housing bubble, but certainly the way the CRA (combined with the Home Mortgage Disclosure Act, the Equal Credit Opportunity Act, and the Fair Housing Act) were modified and interpreted over time may have encouraged additional "creative underwriting". Here is an excerpt from Closing the Gap: A Guide to Equal Opportunity Lending from the Boston Fed:
"Credit scores. While credit scores can be an analytical tool with conforming loans, their effectiveness is limited with CRA loans. Unfortunately, CRA loans do not fit neatly into the standard credit score framework . . . Do we automatically exclude or severely discount . . .loans [with poor credit scores]? Absolutely not."
I think CRA/HMDA/ECOA/FHA were a minor part of the bubble compared with the GSEs (and Congress pushing them into sub-prime), the mortgage interest deduction, the capital gains reduction on home sales, and good old bubble mentality in the private sector, but it all added up.
but Bush does not dictate the price of gas.
Even if Bush did dictate the "price" of gas, he would not dictate its "cost". Price controls lead to shortages, so while a price might be low, the cost of driving around until you find a gas station that still had gas is higher.
Or if Bush gave government money to gas stations to keep their price low, it would "cost" taxpayers.
You can't legislate economies into being (although you can legislate them out of existence).
85% of population in India do not have any bank accounts.
Which goes to show, Indian banking regulations are not serving their people, but making it too hard for the common people to join the banking system.
In the US, my dogs get credit card offers in the mail! (OK, maybe we've gone too far, but you get the idea...)
the US government's chief role is now redistribution of wealth
And if that wealth was truly being redistributed from the well-off to people in poverty that would be one thing, but most of Social Security and Medicare is actually going to people who already are fairly well-off. On the supply side, we also have tax breaks for mortgage interest (how good idea does that seem now?) which don't matter to most people in poverty as well as payroll taxes rolling off around $100K per year.
All these entitlements distort markets without actually achieving much real "redistribution" as leftists would like.
Joe himself would get a tax cut under Obama's plan
People keep saying this, but do you mean he would get a tax cut AFTER the sunset of the Bush tax cut raises his taxes first, or is Obama saying he won't let the Bush tax cuts sunset?
As others have said, this really is a GSM issue and not an iPhone issue.
I used to have a Blackberry (and almost everyone in my company did) and it seemed to be much worse than the iPhone. Unfortunately, I can't offer a scientific reason why.
At every speaking event, someone would come up to the podium with a Blackberry in their pocket, and halfway through their presentation the mics would pick up "RATTA-TAT-TAT RATTA-TAT-TAT" of the RF.
iPhones seem to have to be within closer presence to mics or amplified speakers than Blackberries to be picked up by them.
The only places in the world you see the need for microloans are in countries where there is too much bank regulation.
Here is what the Index of Economic Freedom says about Indian banking:
India's 28 state-owned banks control about 75 percent of loans and deposits, and 29 private banks and 31 foreign banks make up the rest. The government owns nearly all of the approximately 600 rural and cooperative banks and most other financial institutions. Banks must lend to "priority" borrowers. Foreign ownership of banks and insurance companies is restricted.
That's why there is microlending in India, the banking system is almost totally an inefficient government monopoly.
the uncertainty principle forbids refreshing qbits
Only if you measure them. You can do quantum error correction using quantum computing itself (see this paper for example).
A computer based on this would have to make the hole quantum calculation on 1 3/4 seconds
Since the coherence time is long (over a millisecond), quantum error correction can allow for almost any calculation.
Don't blame the CRA, it only prohibited red-lining (denying a loan based on geographic area rather than individual credit rating), and only applied to banks, not independent mortgage companies.
The Home Mortgage Disclosure Act (HMDA) applied to banks, mortgage companies, and other lenders. Read what the Boston Fed was telling lenders about it...stuff like "Lack of credit history should not be seen as a negative factor...In reviewing past credit problems, lenders should be willing to consider extenuating circumstances. ". There also was the Equal Credit Opportunity Act and the Fair Housing Act.
Let's also not forget the FHA zero-downpayment program.
Don't blame Fannie Mae or Freddie Mac either. They weren't the ones making the loans.
But they did buy or guarantee nearly $400 million of Alt-A and subprime mortgage investments. At a conference in spring 2005, Fannie Mae Executive Vice President Thomas Lund warned about the danger to borrowers, asking, "Are we setting them up for failure?"
Besides the desire of the GSEs to get into the >80% LTV loan secondary market on pure profit grounds, they were also pushed by Congress. For example, see Schumer Unveils New Freddie Mac Plan With HSBC That Includes Low-Interest Low-Downpayment Loans.
Ironically, it was the repeal of the section of the Glass-Steagall Act (passed in response to the depression) which strictly separated banks from securities firms (to help assure the stability of banks) which exacerbated this mess and resulted in such massive failures.
No one has explained to me how this has changed the situation - "unified banks" have actually done a better job recently weathering the storm compared to banks with no investment side or pure investment banks. And they did better during the Great Depression as well. Glass-Steagall came from a war between the Morgans and Rockefellers rather than any actual data.
No honest person can say that government entities or regulations were "the cause" of the recent credit crisis, but certainly many regulations, Congress (in a bipartisan fashion), and the GSEs were on the side of "affordable housing" and "creative underwriting" for political profit, just as much as the private sector was in it for the monetary profit.
Something I've never understood is how the government got the money to pay for the war machines, bombs, and bullets. I mean, you hear all the time how that got us out of the depression, but it just doesn't add up.
The Implications of WWII Spending for Local Economic Activity, 1939-1958
"Studies of the development of local economies often point to large-scale World War II military spending as a source of long-term economic growth, even though the spending declined sharply after the demobilization. We examine the longer term impact of the temporary war spending on county economies using a variety of measures of socioeconomic activity: including per capita retail sales, the extent of manufacturing, population growth, the share of women in the work force, housing values and ownership, and per capita savings over the period 1940-1950. We find that in the longer term counties receiving more war spending per capita during the war experienced extensive growth due to increases in population but not intensive growth, as the war spending had very small impacts on per capita measures of economic activity."
So if it wasn't that, what caused the "Great Escape" from the Great Depression?
Here is one theory:
"In 1945 the death of Roosevelt
and the succession of Harry S Truman and his administration completed the
shift from a political regime investors perceived as full of uncertainty to one in
which they felt much more confident about the security of their private prop-
erty rights. Sufficiently sanguine for the first time since 1929, and finally
freed from government restraints on private investment for civilian purposes,
investors set in motion the postwar investment boom that powered the
economy's return to sustained prosperity notwithstanding the drastic reduc-
tion of federal government spending from its extraordinarily elevated war-
time levels."
What happened to the White MacBook with 2GB RAM?
You also have to have a holographic "camera", and those are not easy, especially since they require LASER light.
A computer-generated hologram can be built from any 3D mathematical model. The 3D model could be built from from interpolating parallax from stereoscopic image capture.
Practical computer-generated hologram displays will probably be much "simpler" than analog film holograms (fewer virtual views per degree, no horizontal parallax, etc.)
The Impossibility of a Soft-Landing
June 30, 2000
This acute supply and demand imbalance led to year over year price increases
of 29% in "wine country" and 34% in the Santa Clara region. Elsewhere, prices
surged 17% in Orange Country, 19% in Northern California, 21% in the San
Diego region, and 34% in Monterey. Clearly, this has developed into a
precarious statewide housing bubble. Amazingly, we hear not a word of
concern about what is a major systemic risk to the U.S. financial
system. And, importantly, the Fed's decision to let the party continue
allows the great California real estate bubble to run to even more
devastating extremes. Who is minding the store? Most unfortunately, this
is a replay of the 80's real estate fiasco but at a much grander scale -
actually the proverbial "mountain versus a molehill" applies. Yet,
amazingly, no one dare say "enough is enough," and instead the
dysfunctional marketplace continues to fund the boom despite the
obviousness of the unsound bubble. Massive credit excess feed asset
inflation and a major misallocation of resources, as the Fed tinkers
with rates. What a fiasco.'
Sub-Prime Industry Up in Arms Over Fannie Mae Announcement
December, 2002
Fannie Mae has a new program out for borrowers with lower credit
ratings and the sub-prime industry is taking exception.
The Executive Director of our industry association, NHEMA (link found
in our Resources section) was quoted in today's American Bankers as
saying "Fannie Mae is expanding its mission into areas where it has
virtually no experience, and taxpayers should be prepared for a
bailout that could rival our savings and loan experience," and that
the association predicts that the program will cost Fannie its biggest
losses ever, he said. The outcome, he said, will be that consumers
with credit problems will "be back where they were 25 years ago -- no
access to mortgages or loans at all, other than loan sharks."'
I'm talking about enforcement of regulations to disallow the "innovation" that created those complex, uber-tranched, MBS-backed securities that were impossible to scrutinize effectively.
You know the Fannie Mae was set up by the government during the New Deal specifically to provide a secondary mortgage market through MBSs, to buy mortgages from banks so that they could have the capital to continue to loan to home borrowers (with the implied backing of the US government). Moreover, the GSEs went on to invent the CMO to provide several tranches of risk so they could more effectively finance the secondary market.
I'm talking about enforcement of regulations to disallow the "innovation" that created those complex, uber-tranched, MBS-backed securities that were impossible to scrutinize effectively. I
Heh, the result would be the same as what I suggested - no one would want to take on the risk of subprime loans without combining them in an instrument with 80% loan-to-value loans.
Computers don't change the intelligence of kids, but they may help their motivation.
While research shows IQ is highly heritable (heritability of IQ between 0.4 and 0.8 in the United States), some of it clearly is not, which may be the key to the Flynn Effect of rises in average IQ in economically developed countries.
It is possible that some of the marginal non-heritable IQ rise is due to exposure to complex and challenging mental stimulation of children. In which case, computers may change the intelligence of kids if they are used in a constructive way.
Almost any marginal gain in IQ is likely to enhance lifetime earnings (though perhaps not as much as we once thought), so it is a good idea to encourage it.
Of course, whether a government-sponsored purchase of lots of computers for children will achieve IQ-enhancing results is a bigger question - the question is how they are used, if at all, and what traditional instruction their use may crowd out.
Of course, the long-term solution is genetic engineering for higher IQ....
So the Framm-Leach-Bliley Financial Services Modernization Act allowed commercial and investment banks to consolidate. So what?
Seems like the non-commercial-bank investment banks (Goldman Sachs and Morgan Stanley) are the ones who screwed up the most and went down biggest, as did the non-commercial-bank GSEs.
Perhaps that regulation change contributed to IndyMac and WaMu going down (I don't know how much they failed because of primary versus secondary market mortgages), but to date very few "universal" commercial banks with investment banking arms have actually gone down. Infact it looks like "universal" bank JP Morgan Chase is about the rescue WaMu, something that would have been impossible before the FSMA.
Now if you were talking about regulation that said "it is illegal to loan someone more than 80% of the value of their house", maybe, just maybe that would have cooled the housing bubble and reduced the risk of subprime default (assuming most people would not have found some way to sneak a loan from their parents or whatever for the 20% downpayment). But then everyone who believes in "affordable housing" would have flipped out.
Because the regulations that *were* in place to stop this problem were altered or eliminated
Which regulations, specifically?
Pity no one learned from Enron
From Enron came SARBOX.
until you have to bail out your buddies
A true laissez faire capitalist doesn't think the government should bail out people who made financial mistakes.
There was so much return on these subprime loans, that Fannie and Freddie were financially pressured into purchasing up blocks themselves.
You mean Congress pressured the GSEs to take on $1 trillion of Alt-A and subprime loans in the name of "affordable housing" between 2004 and 2007, as the GSEs needed to look good to Congress after their accounting was found to be fraudulent.
The GSEs should have been dissolved long ago, especially once their accounting fraud was revealed. The GSEs were private/public frankensteins whose implicit backing by the government gave them a near duopoly position.
First, I don't think any sane person thinks the government is the "main blame" for the subprime crisis. I feel the "main blame" goes to those who made loans and purchased MBSs/CMOs without an accurate risk model (specifically, what happens if home prices start to go down?). However, the government did make things worse.
80% of the loans which were fully or largely outside CRA jurisdiction
But many were. Specifically, after 1995 changes in the CRA banks were pressured to take low-income CRA loans. Don't take my word for it, read what the Comptroller of the Currency said:
Letter states that financial institutions may receive favorable CRA credit for investing in a middle income housing down-payment assistance program if the investment is a "qualified investment" under the CRA regulation...Interagency CRA letter stating that an investment in an MBS bond that is specifically tailored to an institution's CRA requirements appears to be a "qualified investment" under the CRA regulations...purchases of obligations of certain special purpose vehicles backed by affordable housing mortgages...
Again, part of the problem, not all of the problem. Government also enhanced the housing bubble in general through mortgage interest deduction as well as zoning regulations.
Throw in unregulated ratings agencies
You may want to Wikipedia Nationally Recognized Statistical Rating Organization, recognized by the SEC to determine whether securities are "investment quality" or not for regulatory bank and broker-dealer net capital requirements. Years ago people in the investment area started suspecting the NRSROs were screwed up (thus all the Credit Derivative Swap insurance policies), but the SEC didn't do much to reform.
You can blame Bush all you want, but lets also remember Democrats were pushing the GSEs to take on additional alt-A and subprime loans in the name of "affordable housing". They are still talking about bailing out individuals who took out unsustainable loans. I don't think we should bail out Wall Street firms or individuals, lest we reward all of their bad risk taking.
Like all great disasters, there were lots of people and problems contributing to the problem.
What we do know is that the 70,000 pages of new banking regulations published every year did not stop it.
Bryan Caplan's The Myth of the Rational Voter points out that when the average beliefs of voters are consistently wrong in the same direction, these biases do not cancel each other out; they compound.
In particular, it has been proven that the average voter is wrong about economics in a consistently biased way.