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Question of the Day: What’s One Thing the Credit Crisis Taught You?
By JLP | August 30, 2010
Here is today’s Question of the Day:
What’s One Thing the Credit Crisis Taught You?
To me, I think one thing that this crisis taught me is that the government will do anything without first counting the costs of that action. The reason for this is that there really are no consequences for government leaders aside from losing their government position. When the bubble burst, they were quick to haul in all sorts of business leaders and question them as to what happened while they completely ignore their impact.
There were other things I learned too, but this was the main thing for me.
NOTE: by “government” I’m referring to both parties, as both parties played a significant role in this particular crisis.
What about you?
Topics: Question of the Day | 9 Comments »
August 30th, 2010 at 2:42 pm
That demand-side economics (aka Keynesianism) doesn’t work. We don’t need an economic policy that focuses solely on supply or solely on demand, but one that finds balance between supply and demand through the use of market forces.
Unfortunately, politics seems to preclude any rational thought.
August 30th, 2010 at 3:34 pm
I learned that:
credit-card companies are evil
housing values can fall
stocks can drop 50% in a few months
Wall-street controls the Fed government
there are idiots in both the dominating parties
August 30th, 2010 at 3:47 pm
First and foremost, there are no experts when it comes to economics. That spending lots of money doesn’t guarantee results. That politicians are the primary cause of most economic problems. That it is never different this time. That there is no substitute for sound judgement when its comes to leverage and down payments. That politicians will partner with Wall Street when times are good to rip off the consumer, then when times are bad will stick the taxpayer with the bill to clean up the mess.
August 30th, 2010 at 10:20 pm
We’re all screwed…
August 30th, 2010 at 11:12 pm
I learned the old rule that cash is king! Having enough cash on hand allows you to take advantage of everything going to hell!
August 31st, 2010 at 8:41 am
Positive lesson: Dollar-cost averaging works – if you have the correct asset allocation, then just stay the course regardless of what the markets are doing.
Negative lesson: When you end up paying 33% more per month for 10% less house than your old apartment, it probably wasn’t a good idea to buy.
August 31st, 2010 at 11:56 am
It taught me that I do have the intestinal fortitude to leave money in the market even when my investments are down 70%. A long-term outlook really does work for me.
September 1st, 2010 at 12:35 am
Key lessons are “stay the course” and that there are lots of misinformed people out there making HUGE financial decisions. Scary.
September 2nd, 2010 at 10:08 pm
I have to disagree with Ron…
Politics does NOT preclude rational thought.
Many politicians act very rationally, when you understand that they simply want to keep riding the gravy train. It’s when you take them at their word that they want to “help” that their actions seem irrational.
As for lessons from the crunch… The market crash taught me that I’ll need a pile of cash on hand when I retire, unless I want to get caught in the down cycle and either work longer or live on a lot less!