Why first ENRON and now the sub-prime crisis? What's going on?

Question

How do we stop decent people from having their lives destroyed? How will we make things safe for families?

Answer 1

Conservatives don't like to admit it, but capitalism requires a certain amount of regulation to work properly. Neoconservatives (i.e. Reagan and after) believe that regulation is just bad, -any- regulation. They de-regulated everything they could, allowing people to misbehave.

We had a huge economic crisis in the 1930s. Under Roosevelt, regulations were passed to protect investors, borrowers, etc. When there was very little trouble for the next 50 years, Republicans decided we didn't need regulations after all! The GOP's motto is: "Just get government out of the way and let me make money!"

So the cycle repeats itself. When there's enough pain the people will put the Democrats back in. Sadly, we don't have people like FDR anymore. But the Democrats always have to come in to 'clean up after the elephants'.

Answer 2

Regarding your first question, in an open and free economy there are going to be company and market failures. In a way, the economic pain suffered by companies and investors is a sign that the system is working, ie rationalization of capital.
Enron was simply a large company where the top executives began commiting bad acts. Not sure how you will every stop that.
Now protecting decent people. Good idea, but more difficult to manage. Define destroyed? Is that my 401k losing 20%?
The pension gaurantee fund is underfunded and people are shocked to find out it uses set payout, not related to the company pension plan the retiree was expecting.
Or losing my job after 10, 20, or 30 years with a company?
The sub-prime segment should have had much more oversight and laws should be in place to protect borrowers from high fees and allowing foreclosure on any amount over the actual appraised value of a home.

Answer 3

Hmmmmm, stop poor people from borrowing money to buy houses they cannot afford ???

Actually having the SEC investigate companies that cook thier books, instead of letting them slide by for 8 years with no investigation?

You tell us .

Answer 4

American business greed. Break all the big multi nationals etc up into small units so they don't have the power.

Answer 5

It is scary, isn't it?

There is definitely a whiff of a developing Serbian society in the air.

Answer 6

Greed is going on, and globalised markets are going on, golden hand-shakes are going on, and the poorest loosing out again is going on.