Our economic engine has produced a lot of undesirable results over the years and in many instances it has been revealed after the fact that knowledge pertaining to those undesirable results was understood and ignored. This is the business as usaual model we have in place. It desperately needs to change.

The alteration of the mortgage lending model is central to what has occurred. In this I refer to the entire model, to include efforts to modify the range of prospective home buyers and also the details of the lending and qualification process.

Needless to say the fundamental element of the model which changed was the general condition of risk to buyers, sellers and investors. This is the core element, which in pure mathematical terms was well understood, and which was changed in ways that ignored the very real probable outcomes of the change. The implementation altered the entire dynamic of the housing market which gave rise to a general inflation of housing prices which drove the market to unsustainable levels.

It can be stated with a very high degree of mathematical certainty that this would be a predicatble and known result and that it would inevitably lead to a crash. In all of science and math the notion of a closed loop system and the effects of a feedback loop within the system is well understood. It is well known to be a required adjustable parameter which is absolutely essential to regulate the process and which when uncontrolled or absent makes the process run away and ultimately causes a catastrophic failure.

Even though my knowledge of this is derived from a completely different discipline than economics the fundamentals of the math are identical. It is apparent to me that within the economic model there is the profit parameter which could be considered as analogous to the feedback loop parameter which provides for regulation of the process. In this context it is apparent that the feedback loop adjustment was 'cranked' way up in order to provide a large degree of amplification or gain if you will. In so doing it caused the system to overheat and essentially blow up. It's very interesting how mathmatical concepts are so universally applicable.

In human terms where this all went wrong is the persons who had their hand on this controlling element almost certainly and knowingly refused to regulate the process and thus directly and knowingly caused the failure. This is way too fundamental a part of all this not to recognize and acknowledge this.

I say all this because what has occurred was easily known and could have been prevented. The only reason it occurred is because people stood to make vast sums of money. It is the greed of the persons within the system and those who were the regulators of the system (who in practice are one and the same) who brought this about and who are presently not being held to account for what I can only see as extremely reckless conduct.

There are truly no unknowns in all of this. Of that I am sure. The Congress of the United States, Wall Street and the finacial sector in general bear a huge responsibility for this. They conducted themselves absolutely recklessly, without regard to the risk and have inarguably harmed this nation in a very serious way. We, right now, have persons in Washington who refuse to acknowledge this and who are in positions of authority. Those persons are guilty of very serious misconduct and in my mind are absolutely criminally liable. Fundamentally this is truly a very simple system that in no way should ever be allowed to malfunction in the way that has occurred. I cannot get past the idea of how the regulating aspect of this has to have been knowingly violated. At a very basic level it is impossible to arrive at a different conclusion. There are a lot of very top level people within the system who have intimate knowledge of how this works and it is my opinion that they should all be gone. They ignored the most basic rules and have cost the nation an untold amount of money. For them to remain is as far from responsibility and accountability as I can think.

I know Obama had some strong words about all this last night. However Geithner was chairman of the NY Fed during the time in question so any real fix is hopelessly compromised. As this applies to my analogy, the pieces that have been put in place are improperly matched to their function and almost assuredly cannot work. This mismatch suggests more than a little misunderstanding of the operation of the overall mechanism. Where we continue to hand over billions of dollars to various banks or other entities where the totals run well in excess of the market capitalization of those banks there is a problem.

Statutorily speaking those banks are supposed to be taken over. Efforts to preserve shareholder value are the reason for the way it is being undertaken but as far as I know there does not exist any legal statutory obligation upon the part of taxpayers in this regard. The thing that is occurring here is risk is being arbitrarily reassigned from the investor class to the taxpayer class. There is no explicit provision in law that I'm aware of that provides for this type of reassignment of investment risk. There are also issues regarding the investor class where an unknown number of the members of that investor class are foreign entities. I find it a very sticky thing to have taxpayers underwiting the investment losses of non US citizens. That raises all kinds of alarms for me and I can't see how that is in any way permissible. It gives me serious heartburn to know my taxes are being used to bailout investors in Saudi Arabia or China. I have grave doubts this would be reciprocated if the shoe were on the other foot. I would also dearly like to know what classes of persons or entities hold all the billions (trillions?) of almost worthless derivatives that are undoubtedly hanging in the balance in all of this. I may be misinformed on some of these things and welcome any insight about how these things are described in the applicable statutes.

I know my comments won't really alter the course this will take but when I consider the systemic corruption it implies I'm left with no hope for the future of this country.

I know a lot of people won't like this but it is what we have.

The leaders of the finacial system of this country have screwed every citizen royally and Obama isn't going to do a thing about it.

We have already ponied up enough $ to buy every one of the top banks. We have gotten almost nothing in return. Paulson struck a sweetheart deal that returns to taxpayers less than half of what European governments got from their banks. We have been shafted big time. There isn't a job in this country where an employee can screw up in a major way and remain employed.

The top tier executives in these banks and other institutions are still right where they've been and are still screwing consumers like if nothing at all has happened.

Taxpayers are being made to eat investor losses where those losses are in no way the proper liability of taxpayers.

What I see is business as usual with zero accountability.

The working people of this country are held to account for their actions every day. We understand and accept that. I see no reason it isn't applied to all citizens evenly. Obama is on TV right now saying all the right words (again). I am still waiting for those words to be translated into action that is equivalent to what 99% of Americans have to conform to. 

Honestly, I don't see any difference from Bush.

So far change is not happeneing.

We still have two sets of rules which apply a different standard of performance and accountability.

As we have read in the current news cycle the insurance industry in general is thoroughly broken in so many ways I can't begin to describe it.

The most awful part of it is in the notion of risk as it applies to health care. The risk element is really about risk associated with profit and inherently degrades the health aspect. The system of managed care that has evolved is about profit not about dispensing health care services. Thus, the purpose of the system has been turned on its head and has become a money making machine instead of a system of providing medical care. Within the industry vast sums of money are channelled into lobbying efforts that are directed at our lawmakers that enhance the profit element at the expense of provisioning health care. As various players in the field have grown larger and more powerful in the political arena it has tilted the playing field that much more to the disadvantage of the insured.

The above is exactly the same as the banking and finance sector where banks grew larger and more powerful over time and used depositors dollars to influence our elected officials in ways that are disadvantageous to those depositors.

In all cases where industries use money from either depositors or from insured persons to lobby our public officials solely for the purpose of profit and which resolves to a factual degrading of services or actually inflicts harm has become a common condition of the socio-economic scheme of this nation. It is morally and ethically contemptible to have this condition be the defacto standard of conduct for business.

One major reason we have ended up with this condition is that corporations have been allowed to grow disproportionally large, become politically influential and along the way have corrupted our public officials via the scheme of campaign finance.

When you examine the trend of legislative action that has been the outcome of this relationship you cannot escape the reality that the relationship has enhanced the power of the providers of services and seriously harmed those persons who necessarily must use those services. Our current financial dilemma is a product of this relationship and both the business sector and our congress are undeniably duplicit in creating it.

We have evolved a public / private realtional condition in this country that is absolutely and undeniably harfmul to the general populace. Until citizens themselves address this there wll not be a change. Each and every American needs to write a letter to their public officals demanding an alteration to the status quo.