The real truth about the 2008 financial crisis | Brian S. Wesbury | TEDxCountyLineRoad

This talk was given at a local TEDx event, produced independently of the TED Conferences. The Great Economic Myth of 2008, challenging the accounting to accounting principal. Brian Wesbury is Chief Economist at First Trust Advisors L.P., a financial services firm based in Wheaton, Illinois. Mr. Wesbury has been a member of the Academic Advisory Council of the Federal Reserve Bank of Chicago since 1999. In 2012, he was named a Fellow of the George W. Bush Presidential Center in Dallas, TX where he works closely with its 4%-Growth Project. His writing appears in various magazines, newspapers and blogs, and he appears regularly on Fox, Bloomberg, CNBCand BNN Canada TV. In 1995 and 1996, he served as Chief Economist for the Joint Economic Committee of the U.S. Congress. The Wall Street Journal ranked Mr. Wesbury the nation’s #1 U.S. economic forecaster in 2001, and USA Today ranked him as one of the nation’s top 10 forecasters in 2004. Mr. Wesbury began his career in 1982 at the Harris Bank in Chicago. Former positions include Vice President and Economist for the Chicago Corporation and Senior Vice President and Chief Economist for Griffin, Kubik, Stephens, & Thompson. Mr. Wesbury received an M.B.A. from Northwestern University’s Kellogg Graduate School of Management, and a B.A. in Economics from the University of Montana. McGraw-Hill published his first book, The New Era of Wealth, in October 1999. His most recent book, It’s Not As Bad As You Think, was published in November 2009 by John Wiley & Sons. In 2011, Mr. Wesbury received the University of Montana’s Distinguished Alumni Award. This award honors outstanding alumni who have “brought honor to the University, the state or the nation.” There have been 267 recipients of this award out of a potential pool of 91,000 graduates. About TEDx, x = independently organized event In the spirit of ideas worth spreading, TEDx is a program of local, self-organized events that bring people together to share a TED-like experience. At a TEDx event, TEDTalks video and live speakers combine to spark deep discussion and connection in a small group. These local, self-organized events are branded TEDx, where x = independently organized TED event. The TED Conference provides general guidance for the TEDx program, but individual TEDx events are self-organized.* (*Subject to certain rules and regulations)

Comments

1. This talk is why I have gone off Ted talks. Long rambling talks by people who have little to say in actuality. So the crisis was due to an accounting rule 'mark to market ' which was removed in 2009 and is the real reason for recovery. Can't believe he expects anyone to believe it's so simple. In the end he just says when things are good its due to free market capitalism and when they are bad blame the govt. No wonder I have yet to see a YouTube video backing up his points.
2. Subprime was not big enough. It was the massive leveraging from derivatives and CDS.
3. To put it simply, you're wrong.
4. Section 8 is what caused the price bubble in my old neighborhood - thru the beginning of 2008.
5. Interesting PR attempt, but people are seriously fed up and I think stunts like this only make things worse. A lot worse.
6. Actually this guy is right AND the people blasting him are kinda right as well. What Mark to Market does is it stops you from blowing up your credit portfolio based on fantasy valuations of securities. So introducing mark to market indeed caused the bubble to pop. The bubble was the REASON, mark to market was the TRIGGER.
   Dodd-Frank then took mark to market away - to REINFLATE the phantasy valuations. And now we're in that phantasy valuation bubble AGAIN. It WILL pop; only the TRIGGER will be different.
7. People see The Big Short. Think they're in the know. Can no longer listen to perspectives and history. Must villainize. Fix world. Humiliate the bad guys. Make self the hero.
8. We really do need to end the Federal Reserve
9. I actually thought he had something Intelligent to say, at the end all he was trying to do was divert Blame. Bankers and Government are responsible, but bankers are really the scum of the earth, willing to make profits even if the whole country is dying of hunger.
10. Possibly the worst, most misinformed TED talk in my 5+ years of watching TED. How do you guys screen these folks?
11. Most of these MBs and CDOs were so complicated almost impossible to value , rating agencies hadn't a clue how to even begin rating any of these products. There all in bed together so don't expect honesty and not much has changed  either.This guys Ted talk is pretty lame.
12. This guy ignores all the blatantly obvious frauds committed by the banks and policy makers. He placed all his explanation on interest rates, failing to accept any criticism of capitalism and especially deregulated capitalism.
13. The GOVERNMENT guarantees savings accounts for 250,000 and then the GOVERNMENT says it's OK for banks to speculate more with savings and to waive some of their rules so more people can buy houses and somehow that is all the fault of the BANKS ?? Banks don't inflate currency...government does. Banks don't create fiat currency...government does. Banks don't run up the national debt to 20 trillion...the government did that.
14. Interesting.  I have no way of fact checking what he said, but I WANT to believe it.  Funny how he calls out the three guys that say they "fixed" the problem.What's that saying you never want to hear? "We're from the government and here to help."
15. Root cause: the credit expansion. The only real solution would be to privatize money. As long as money is controlled by the government (socialism) crises will be cyclical.
16. Trying to explain the REAL reason in 2014 is so dangerous that it could have concequences in 2017
17. Sorry --but he doesn't really know what he is talking about. People got Sub-prime loans with adjustable rate mortgages and house prices kept rising with speculation buying. Then Companies started laying off and people fell behind on their mortgages. Millions lost their Jobs and were under water. Bush tax cuts actually slowed the economy--tax cuts on high incomes caused the Great Recession and the Great Depression --E
18. Did this guy actually credit Barney Frank for helping to fix the 2008 crisis? Gimme a break! Frank is one of the all time useless politicians in the history of this country. Wesbury totally misses a great number of factors that caused the 2008 meltodown. ARM's, predatory lending, no income verification, buying far far outside your means and the list goes on. You had people making $30k a year qualifying for $250k loans. I know people personally that didn't care...get me into the house no matter what and when they got in, it was nothing about bragging about how big their home vs everyone else. Everyone had to outdo everyone with the size of their home.
19. The cause of the financial crisis was banks setting the "loan to deposit ratio" (LDR) at more than 100%. In other words, they were lending out more than was coming in; which they were borrowing from each other as tier 1 capital (definitely will be paid back). When LDR < 100% it is called a "fractional reserve" system where the money lent out is less than that which comes in - and at the end there is a reserve which covers the initial deposit. LDR > 100% there is no reserve; that is not a fractional reserve system. LDR > 100% is a Ponzi scheme and those responsible, including all the regulators that allowed it, should be locked up.
20. WHAT!?? ALAN GREENSPAN THE BIGGEST BRAIN IN THE WORLD?
    JESUS!!! THAT'S WHY OUR SOCIETY IS SO FUCKED UP.
    
    IN MY OPINION.....THAT MAN BELONG IN JAIL.
    
    THE FEDERAL RESERVE WAS CREATED TO ROBBE THE PEOPLE AND THE WORLD. JESUS KNEW ABOUT THE MONEY EXCHANGERS. JESUS TOOK THEM OUT OF THE TEMPLE WITH A WHIP ON HAND.