Why is Obama punishing Wall St, when Dems in Congress caused the 2008 crash? (racism, 9/11)
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if what you say is true, why didn't the democratic congress stop them?
The Democrats were in control of nothing until 2007. For the next two years, they could try to get done what they could get done in the face of wall-to-wall Senate Republican filibusters and looming actual and threatened Presidential vetos. The 110th Congress did do a very good job of bottling Bush up and keeping him from doing any further damage, but there was not much they could do about the deep wounds that had previously been delivered. By 2009, they did have the powers that they could have put to much better use in say 2005. But by 2009, it was too late to do anything but try to stave off a then all but imminent full-blown global financial collapse.
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Originally Posted by floridasandy
it took both sides to bring us to this unfortunate time in american history.
Yes, in a sense, but that sense is not a practical one. In practical terms, the Republicans were responsible, by acts of omission and commission, for the entire debacle. Democrats were principally in the same boat as the rest of us -- bystanders who could complain and warn, but who didn't have the political clout necessary to do anything much more about things than that.
I'll see your bill and raise you one Democrat provision in that bill: A good CRA status was the ticket to the new game in town. Groups like ACORN were able to leverage this and basically extort even more money.
CRA played no role at all in the evolution of the credit crisis and ensuing disasters in the broader economy. None. The whole notion was made up by right-wing propagandists -- principally Thomas DiLorenzo at the notorious Mises Institute -- as a means to divert mounting blame for the crisis off of Republicans and onto Democrats -- Bill Clinton and Jimmy Carter if at all possible. This entire CRA narrative is a sham. No serious person takes it as anything other than a hoax.
Right, repeal of Glass-Steagall had been a long-term Republican agenda item, and they had failed at it many times over before they finally succeeded when Clinton relented and worked out a deal to get it through. Now in fairness, there were provisions of Glass-Steagall that actually were hampering for no real reason US banks and financial corporations who were trying to compete in newly emerging international markets, and those at least could reasonably have been modified or done away with. But even with the sweeteners that Clinton was able to pry out of the Republicans (such as strengthening CRA), the actual Gramm-Leach-Bliley bill was a fox-in-the-henhouse idea, as was almost immediately demonstrated with the emergence of the rigged IPO scandals that simply bilked the public and put billions into the pockets of the banks' favored customers. But given the ultimate results of the 2000 election there was never going to be a way to go back and undo the damage done.
People like to go all the way back to Carter for the blame game, and completely skip over GLB, like it didn't matter.
One particularly incompetent administration of the government caused it, in concert with some grossly unprincipled and also unregulated private mortgage brokers, some crooked real estate appraisers, an overwhelmed and underperforming bond rating industry, and a passel of soon to be very wealthy cowboy capitalists on Wall Street.
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Originally Posted by MarkT3
Now Obama is repeating the untruth that the banks caused it...
That's not an untruth, but the banks he is talking about are not your neighborhood community bank. The villains here were the major and minor investment banks in New York and elsewhere collectively known as Wall Street. They knew full well what they were doing, and they did it anyway because it put huge numbers of dollars in their pockets. There's nothing really wrong with having huge numbers of dollars in your pockets, but there is something wrong with some of the ways that people use to put them there, and this disaster was a prime example of that.
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Originally Posted by MarkT3
...in my community it was seen as a good thing that the tax payer was able to rescue the banks and the banking system. It's the first time we tax payers saw the government doing something good with our dollars.
It was a very good thing that the government under two adminstrations was able to develop and implement the steps necessary to keep the financial system away from total collapse. Not because they were all such nice guys and all, but because we could easily have been talking about primary unemployment rates of 30% instead of 10% if that effort had been unsuccessful. The ultimate damage to Main Street would have been simply devastating on an epic scale. That much, we have managed to avoid.
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Originally Posted by MarkT3
But we don't want banks to fail. We don't want to give the government more power to close banks.
The government doesn't close banks. It reorganizes banks that are on the brink of failure, putting them into a form in which they can continue to operate. FDIC is very good at this with respect to small and medium sized banks. There is no similar mechanism for reorganizing giant banks or other financial institutions. The reform bill is looking at how to do that and also at how to keep such unmanageable behemoths from coming into to being to begin with. It's a complicated bit of work.
The government should have bailed out the small scale investors by covering the first 200 k losses per individual. That would have protected most of the people’s pension savings.
Have the words "moral hazard" appeared in the thread yet?
The collapse of a global housing bubble which peaked in the U.S. in 2006...
The housing market did indeed begin a run down from its peak in the Spring of 2006, but that alone doesn't define the popping of a "bubble". The term is much misapplied and misused. Markets go both up and down. This is their nature. Housing is a very large market that is typiclly undergirded by such reliable things as population and productivity growth, so it tends to be a much less volatile market than most. A big ship sailing in calm waters. But that doesn't change the underlying nature (or history) of the market.
There was nothing in a simple (and expected) leveling off of home prices that would have led to global economic crisis were it not for the binge-underwriting of high-cost, low-quality credit paper that Wall Street had been engaged in since 2002. That is what caused the credit crisis, and it was the credit crisis that served as the first domino here, the one whose toppling caused all the rest to go over, one of which was the credit-dependent housing market itself. In the end, housing was much more a victim than a cause of the crisis, and if one separates those two vectors, the notion of a housing "bubble" having occurred becomes a much more difficult one to establish regardless of whether the popular press is able to come to that realization or not.
The housing market did indeed begin a run down from its peak in the Spring of 2006, but that alone doesn't define the popping of a "bubble". The term is much misapplied and misused. Markets go both up and down. This is their nature. Housing is a very large market that is typiclly undergirded by such reliable things as population and productivity growth, so it tends to be a much less volatile market than most. A big ship sailing in calm waters. But that deosn't change the underlying nature (or history) of the market.
There was nothing in a simple (and expected) leveling off of home prices that would have led to global economic crisis were it not for the binge-underwriting of high-cost, low-quality credit paper that Wall Street had been engaged in since 2002. That is what caused the credit crisis, and it was the credit crisis that served as the first domino here, the one whose toppling caused all the rest to go over, one of which was the credit-dependent housing market itself. In the end, housing was much more a victim than a cause of the crisis, and if one separates those two vectors, the notion of a housing "bubble" having occurred becomes a much more difficult one to establish regardless of whether the popular press is able to come to that realization or not.
It didn't take a financial genius to see what was happening when housing prices began to overinflate, and getting a mortgage became easier and easier.
The Democrats were in control of nothing until 2007. For the next two years, they could try to get done what they could get done in the face of wall-to-wall Senate Republican filibusters and looming actual and threatened Presidential vetos. The 110th Congress did do a very good job of bottling Bush up and keeping him from doing any further damage, but there was not much they could do about the deep wounds that had previously been delivered. By 2009, they did have the powers that they could have put to much better use in say 2005. But by 2009, it was too late to do anything but try to stave off a then all but imminent full-blown global financial collapse.
Yes, in a sense, but that sense is not a practical one. In practical terms, the Republicans were responsible, by acts of omission and commission, for the entire debacle. Democrats were principally in the same boat as the rest of us -- bystanders who could complain and warn, but who didn't have the political clout necessary to do anything much more about things than that.
nonsense! are you telling me that even though democrats have had control of the house and senate since 2007 they have never had the chance to do anything since then? they had no ability to repeal anything or rewrite laws? even when they had the power they DIDN'T put it to use because they were part of the problem. they had the congressional numbers to stop the bailouts, but they wanted them!
most people posting now see that both republicans and democrats have done a lot of financial damage to this country and we need to look ahead to what can be done NOW. i will repost an excellent articulate post from denninger: http://market-ticker.denninger.net/a...HANDCUFFS.html
in part:
Yet those who committed the acts that led us to this terrible place, that is the bankers, even when bribery of public officials was going on and the bankers knew it, have not been indicted or prosecuted.
Instead, we bailed them out.
We blew $1.5 trillion a year, or about 10% of GDP for the last two years. President Obama's policies in this regard are a mirror-image of George Bush's, and of course GDP appears to be "growing" when one does this. But this is no more "growth" than it is when you take a cash advance on your credit card - it is simply pulled-forward demand, and now the economy has become dependent on it.
Again, these policies are an extension and in fact an engrossment of what George Bush did.
You have Obama who is in bed with Goldman Sachs....
Nice repetition of one of the latest disinformation media memes...
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