The housing bubble--the dot.com bubble So then why does it always seem to come as a shock to some when it happens? Is it a sort of selective amnesia or is it human nature to not want to believe that the good times will end?Logically just about every economic boom is going to bust sooner or later-historically it always has?
It's not selective amnesia so much as not having a long-term memory. That and needing to find something to point your finger at the opposing party over.
We're in the moneyLogically just about every economic boom is going to bust sooner or later-historically it always has?
These kinds of things didn't happen as often and they weren't as bad during the time when banks were more regulated.
It is human nature to believe that good times won't end. I call it the autopilot effect -- when things go well, people go on autopilot, they observe the world less and their expectations for change diminish.
It doesn't have to be like this though, their are reforms and changes that could end the boom-bust cycle.Logically just about every economic boom is going to bust sooner or later-historically it always has?
Regulation, and a strong social safety net, provides for steady and more sustainable growth. Look at the period between the 40's and the 80's.... along with a high top marginal tax rate, to allow for people to get rich, but prevent the emergence of dynastic wealth. Sure, the bubbles aren't as big, but then again, neither are busts... which is what actually benefits most Americans (and most people in general), where hard work is what is rewarded.
Deregulation, tax cuts on the wealthy and Reaganomics (trickle down economic policy's), have lead to the types of bubbles and busts we've experienced over the past 3 decades. Which allow the wealthy to get dramatically wealthier, while wages have stagnated and actually gone down for people who actually work for a living, and resulted in an economy that looks like a roller coaster ride over the past 3 decades.
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