Re:Debunking “America has become so anti-innovation – it's e...
by VHRanger on Friday May 19, 2017 @10:24AM
(#14375907)
There's very little serious literature that points to "cheap money" as a source cause of 2008. Neither does banks taking risks because they are "too big to fail".
The main cause you get by reading the research on 2008 is that bank managers were incentivized by their shareholders to take excessive risks. This is because 1) shareholders are pretty shortsighted and 2) managers suffer comparatively little personal consequences by crashing a bank (clearly they don't go to jail; they still get the massive bonuses in the years where they pumped returns with excessive risks, etc.)
Re:Debunking “America has become so anti-innovation – it's e...
by pixl97 on Friday May 19, 2017 @10:46AM
(#14376124)
>bank managers were incentivized by their shareholders to take excessive risks.
Which is no different than supplying money to a market below cost. Any market failure that leads excessive lending will lead to asset inflation and reinvestment of that money in speculation.
Not at all. We dealt with a similar collusion between the government and private banking industry in the housing collapse of 2008. Cheap money along with bad policy is problematic no matter where it occurs because the cheap money ends up in the stock market/speculation market eventually.