Obama too young/inexperienced?

[Peter1469]

I've read that some economists state a recession is a part of the cycle of a free market and is unavoidable. Admittedly, I honestly don't know enough about it.

I remember the media silence from the recession in 2000. Although with gas prices and other things as high as they are now, people get more of a physical feeling of the economy and look to point fingers.

In a free market there is a business cycle.  Business will take risks.  Sooner or later these risks will be proven to be unwise and unsustainable.  But before this there will be a lot of innovation that causes growth and prosperity.  Once the “bubble” of unwise risk pops you will see a drawdown in the economy while the market corrects itself (i.e. business stopped doing what is now losing money).  If this drawdown is severe enough there will be a recession.  If the drawdown is very severe you may see a depression.  However, the Great Depression was caused by government over reaction to a recession.    I don’t think that there has been a true depression caused by the free market, although it is theoretically possible, if unlikely. 

Governments try to regulate the market to smooth out this natural business cycle.  This can lower the risk of a recession, but it also limits innovation that could create advances which are beneficial.  The Federal Reserve System does this, as does government regulation. 

The current housing bubble was caused because credit became too easy to get.  Banks sold mortgages like they were giving away candy.  Some of these people in the sub-prime catagory had no realistic ability to pay back the loans.  It was pure insanity.  The money supply was artificially increased by the government (Federal Reserve) and the businesses took way too much risk.  The bailouts reward this risky behavior and prevent the business cycle from working- bad behavior is rewarded (or bailed out) and creates an even bigger bubble that could lead to a depression. 

[wow]

Bush was a two-term governor of Texas-a border state; he did not lack experience.  He lacks brains.

governor of texas is a figurehead position tho

the only decision he ever had to make was whether or not a death penalty inmate would get killed (guess how he decided)

figurehead like queen of england, only they didnt put his picture on the peso

Dumb comment.

[Mr. Ed]

You want educational reform?  Quit making teachers do the job of parents.  They got their own kids to worry about.  '

Our public and private school systems suck because parents have failed.  Not the schools.  Not the government.

Of course, our culture encourages this level of parenting.

Nice cliches.
Can you provide some examples?

sure.

Go to your nearest school.  Attend detention hall.  Follow one of the kids home.  Meet the parents.
Rinse.
Repeat.

[bored]

I've read that some economists state a recession is a part of the cycle of a free market and is unavoidable. Admittedly, I honestly don't know enough about it.

I remember the media silence from the recession in 2000. Although with gas prices and other things as high as they are now, people get more of a physical feeling of the economy and look to point fingers.

In a free market there is a business cycle.  Business will take risks.  Sooner or later these risks will be proven to be unwise and unsustainable.  But before this there will be a lot of innovation that causes growth and prosperity.  Once the “bubble” of unwise risk pops you will see a drawdown in the economy while the market corrects itself (i.e. business stopped doing what is now losing money).  If this drawdown is severe enough there will be a recession.  If the drawdown is very severe you may see a depression.  However, the Great Depression was caused by government over reaction to a recession.    I don’t think that there has been a true depression caused by the free market, although it is theoretically possible, if unlikely. 

Governments try to regulate the market to smooth out this natural business cycle.  This can lower the risk of a recession, but it also limits innovation that could create advances which are beneficial.  The Federal Reserve System does this, as does government regulation. 

The current housing bubble was caused because credit became too easy to get.  Banks sold mortgages like they were giving away candy.  Some of these people in the sub-prime catagory had no realistic ability to pay back the loans.  It was pure insanity.  The money supply was artificially increased by the government (Federal Reserve) and the businesses took way too much risk.  The bailouts reward this risky behavior and prevent the business cycle from working- bad behavior is rewarded (or bailed out) and creates an even bigger bubble that could lead to a depression. 

Thanks for the explanation.