"I would like to know why some consider bailouts, quantitative easing and regulation factors that favor the crisis. And whatever more you have to say regarding monetary policy that is not included in quantitative easing."
The Bailouts were not a bad thing. At least the bailouts of the Corporations that were caught in the down-slide caused by the crisis.
The Banks, should have never been bailed out. They should have been broken up. Let failing parts fail, and reviving productive divisions.
The SuperBanks like Bank Of America, the preservation of SuperBanks will perpetuate further decline in the US financial system.
If the World Market is failing, local governments would/should increase spending to sure up their base. But, quantitative easing, in the manner it is distributed is very bad, and basically useless.
The money trickles to the banks first. The banks are not lending to everyday Americans. They are loaning money to financial investors and firms in order to invest in the markets. The markets are puffed up on corporate cutbacks, job cuts, and demand for stocks as the institutional buying is accelerated due to the cash on hand. It doesn't create jobs for everyday people, doesn't induce spending by job creation or through direct handouts. Even Bush, had the ability to foresee that in order to fully mask the continuation of economic decline he had to put the money in the hands of the people who would spend it. It also doesn't encourage lending for homes. It also does not prohibit the predatory lending that continues to be a main source for all new home loans, of the few little home loans are being approved. These loans are still backed by the government or a government entity.
Of Bush's total Stimulus almost all of it was intentionally passed on to consumers to spend. no doubt it had little to no noticeable affect on the economy overall. The fact that they acknowledged 'little' to no' affect says a lot. Of course in a multi trillion dollar economy is $150B +/- is going to have little. The word play is interesting here. In the same instance there is an acknowledgment of 'little affect' and then 'no affect' The reality is that it couldn't be both. The wording is an acknowledgment that there was in fact an affect. But the affect was on par with the minimal injection into a huge economy.
Of his tax cuts, that 1.2 Trillion in cuts benefited working businesses.
Of Obama's Tarp. (which was and still is in many ways a continuation of the Bush economic policy btw) almost went all to Wall Street. Stimulus isn't too far behind.
One thing that has been speeding along decline is the sweeping of money from consumers. 99ers with no jobs or jobs to apply to now have no income to spend in our economy. The number of unemployed overall, now have to cut back spending and focus on getting by, not making many consumer purchases.
Should the money have been spent on shoring up consumer spending rather than giving money to Big Banks with tons of mortgages set to default? The government, by design obviously, missed out on a huge opportunity. Instead, what happens is, we give money to the large problematic contributor banks. They survive the crisis due to the cash injections. Little neighborhood banks(which made good and responsible loans) failed in the aftermath of the downturn, Big problem banks bought up their assets and their companies, and all we are is a double dip away from another seemingly necessary round of tarp.
What the government should have done was buy up the securities they already own by default. They could have taken possession of all mortgages backed by Fannie or Freddie, especially those sub-prime and balloon mortgages. Then instead of begging Bank Of America to redo the mortgages, The USA could have redone the mortgages. A point or so would have been lost on the mortgages on the front end, but Fannie and Freddie would have made out on the 30 year interest.
The banks have taken the money from the gov. Invested in the Stock market. Frozen consumer lending except in rare cases. The lack of home loans available has depressed real estate so far so fast, it only makes sense of them to use our money or profits made from it to go and buy up the remaining real estate that is now worth a 3rd of what it should be.
Long story short, the monetary policy of quantitative easing is not as effective as economic stimulus in the way Bush envisioned it. And that is hard to say. Less money for Wall Street and the banks, more rebate checks for Americans. At least this will boost consumer spending, adding tax revenues on all levels, and allowing retailers and manufacturers to realize demand and profits that would spur on new hiring.
I firmly believe this would have been a faster way out of this crisis. Wall Street would have suffered and so would have corporate campaign donations but who cares. Wall Street doesn't vote, people do. Obama raised more little sum donations than anyone in history, I wonder why the divergence from his base in favor of Wall Street.
The sad reality is that, too many people in power, present and past have too much invested in Wall Street to let it collapse, unless they pull out liquidity first, then did it on purpose. And therein lies the problem.