Posted on 09/23/2008 5:35:26 PM PDT by Fox_Mulder77
Anyone who tries to explain the Wall Street crisis in a single sound-bite is foolish…or worse. But House Democratic Leaders have found a culprit they can agree on: deregulation.
“This is the fruit of decades of ‘leave the market alone, don’t regulate it. It will take care of itself,” Says House Banking Committee Chairman Barney Frank. His solution? “Clearly we’ve got to get some regulation here.”
“The Bush Administration’s eight long years of failed deregulation policies” is the problem, declares House Speaker Nancy Pelosi.
“A stark failure of the economy and this administration’s laissez faire, take the referee off the field, let anyone do whatever they want to do and everything will be fine,” adds House Democratic Leader Steny Hoyer.
The problem with the Democrats’ “deregulation did it” meme is that it didn’t happen – deregulation that is.
The most significant financial regulatory action in the Bush Administration was Sarbanes-Oxley (Sarbox), a law significantly increasing regulation of the accounting and securities businesses. It spawned twenty – count-em – twenty new rulemakings at the Securities and Exchange Commission, and created a whole new regulatory organ, the Public Company Accounting Oversight Board (PCAOB).
(Excerpt) Read more at blog.heritage.org ...
The failure belongs to the democrats.
When a resolution was on the table to rein in the mortgage lenders, every single republican voted for it to get out of committee and every single democrat voted NO.
The House Banking Committee Chairman is not responsible for oversight on banks or other financial institutions.
Got it.
No. The underlying problem is with fraud.
Where are the Republicans on this?
Why are they always too weak and too stupid to fight back against the Democrats’ lies?
Why are they not putting the blame squarely where it belongs: on Fannie Mae and Freddie Mac’s social engineering policies as demanded by Democrats in congress?
If deregulation is the problem, what new regulations are the democrats proposing to fix the problem?
"Clinton added that "we also must begin to look at the root cause of this, which is these mortgages that people cannot afford."
It was social engineering that caused this.
Red Lining was the practice of lenders NOT lending money in areas where the investment didn't make sense or the incidents of loan defaults were high or the income of residents didn't qualify for loans...
Congress greased the skids for loans - especially risky loans with ZERO down payments for homes with criminally inflated “appraisals”...to people who couldn't prove the ability to repay!
There were Republicans who participated in this crime, but it was predominately DEMOCRATS who pushed it to “buy” their constituents with YOUR money....
This mess is a stinking Albatross that should remain around the Democrat's neck..
I am 100% opposed to a Taxpayer funded "Bail Out. ANYONE involved in this rip off and fraudulently manipulated crises - that ANY fool could have seen coming...should suffer the consequences of their actions.
Let the chips fall.....Let the banks fail.....Let the foreclosures commence..
This bullshit of “buying” what one can't afford has to stop.
No one should profit from their careless or fraudulent behavior.
She'll probably be one of those folks who stand outside his gate and howl at the moon!
Twenty years from now...”Its ALL Bush's fault!”
The market needs oversight just as any other financial institution which has a fiduciary control of the life savings and finances of the American people. Deregulation certainly does and did tremendously helped certain industry in the economy(such as the airline industry in the 1970s) because it sparked more competition for passengers and cheaper rates.
The markets have a Security and Exchange Commission as an oversight authority and it, quite frankly, it didn't do such a good job. Congress complicated the situation by allowing companies which were well-steeped in success in one aspect of the economy diversify and branch out into another (AIG is a great insurance company but was a poor banking one). So, greed had a lot to do with the crisis. Still, most of the problem with the current crisis was caused by lenders making risky loans to unqualified homebuyers. This is where more regulation was needed, IMO!
>It was social engineering that caused this.<
Exactly!
I’m not buying the social engineering argurement as the main cause. I’m seeing too many foreclosed homes in neighborhoods that would not be part of any social engineering project. These home were not bought and financed by the demographic that would be part of social engineerings desired demographic.
Social engineering may be an ingredient, but it’s not the major cause.
Corruption, ignorance, greed, hunger for power by the global elites. We were set up like bowling pins, and now we’re getting knocked down.
One of the components of the crisis is FASB Rule 157 that went into effect Nov 15, 2007 and still has not been suspended.
This is the rule that forced “mark to market” accounting even for illiquid assets.
The main undeniable fact is that when debt becomes 350% of GDP (our highest ever, probably the highest for any major country ever) there are going to be big problems. Greenspan made credit absurdly cheap to the point that it did not reflect inflation or default risks.
The securities were a natural result from excessive cheap credit, the crisis is the next natural result because credit can't be reduced without major pain. The securities crisis is forcing action now, but the pain would have come sooner or later. Inflation is the less painful option that will eventually be chosen (although price rises are a lagging indicator).
The credit market does not need regulation, it needs realistic pricing. A risky loan should have a higher rate, but Greenspan decided that loans should have a ridiculously low rate. The securities market (and F&F and similar market distortions) made sure that risky loans had the same rate as nonrisky ones. That's not a regulatory problem either, just socialism messing up credit pricing.
correct.
What demographic would that be?
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