Posted on 10/01/2008 10:30:02 AM PDT by TruthWillWin
Important information about the deregulation bill Democrats are blaming for causing the economic problems:
The bills were introduced in the Senate by Phil Gramm (R-TX) and in the House of Representatives by James Leach (R-IA). The bills were passed by a 54-44 vote along party lines with Republican support in the Senate and by a 343-86 vote in the House of Representatives. Nov 4, 1999: After passing both the Senate and House the bill was moved to a conference committee to work out the differences between the Senate and House versions. The final bill resolving the differences was passed in the Senate 90-8-1 and in the House: 362-57-15. This 'veto proof legislation' was signed into law by President Bill Clinton on November 12, 1999[1]
To create the veto proof legislation this is what the Democrats insisted on:
Crucial to the passing of this Act was an amendment made to the GLBA, stating that no merger may go ahead if any of the financial holding institutions, or affiliates thereof, received a "less than satisfactory [sic] rating at its most recent CRA exam", essentially meaning that any merger may only go ahead with the strict approval of the regulatory bodies responsible for the CRA.[3]. This was an issue of hot contention, and the Clinton Administration stressed that it "would veto any legislation that would scale back minority-lending requirements." [4]
1. Bill (final) passed with a majority of both parties and was supported and signed into law by Bill Clinton.
2. CRA requirements, the only aspect of this bill that could be remotely tied to sub-prime loans, was added at the insistence of Bill Clinton and the Democarts to the final bill to insure it's passage and make it veto proof.
Have not seen this mentioned and it's very important when trying to understand how we got to the current mess.
Got this information from http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act
FR will not allow me to post a link above so you have to copy and paste.
It’s my understanding that Glass-Steagall was repealed after the fact so to speak. Congress had to act, because they had already allowed Citi to buy Travellers insurance, and Citi had showered money on congress critters. Glass-Steagall prevented banks from selling insurance, insurance companies from offering banking products, and separated investment banking from retail FDIC institutions.
Bump
That is what it did and has nothing to do with the epidemic of sub-prime loans. Allowing banks to diversify if anything will prevent some banks from going under by deluting the effect the bad loans have on the bottom line.
Rubin calls for modernization through reform of Glass-Steagall Act.
.....
Rubin said Clinton administration proposals would permit affiliations between banks and other financial services companies, such as securities firms and insurance companies.
It untied the hands of the evil DEMS.
“Economists Robert Ekelund and Mark Thornton have criticized the Act as contributing to the 2007 subprime mortgage financial crisis, arguing that while “in a world regulated by a gold standard, 100% reserve banking, and no FDIC deposit insurance” the Financial Services Modernization Act would have made “perfect sense” as a legitimate act of deregulation, under the present fiat monetary system it “amounts to corporate welfare for financial institutions and a moral hazard that will make taxpayers pay dearly”. [5]”
Anybody got an opinion on these guys?
It has everything to do with sub-prime loans.
The investment banks sold each other “insurance” in the form of collataralized debt swaps - because they *knew* these loans were toxic. This was a way, they thought, of hedging their portfolio. The government forced entities to write these loans - under threat of litigation - and so they did, in much the same way legitimate insurance agencies are forced to underwrite bad risks, under threat of litigation.
Once the housing bubble popped, the foreclosures started - and all those off-the-books derivatives came due at the same time - and destroyed the entire US investment banking system. Oops.
Yep. And ALT-A L"Liar" loans to "immigrants" were/are the primo example. A huge, untold story. Who was pushing those, you suppose?
These guys?:More Awful Truths About Republicans
From their DNC propaganda article:
The Financial Services Modernization Act of 1999 would make perfect sense in a world regulated by a gold standard, 100% reserve banking, and no FDIC deposit insurance; but in the world as it is, this "deregulation" amounts to corporate welfare for financial institutions and a moral hazard that will make taxpayers pay dearly. Such government privileges are nothing new to Republicans — consider the effective subsidies to the pharmaceutical, sugar, and steel industries — but this particular gift to financial institutions is what allowed the credit bubble to expand to such absurd proportions, because it allowed banks of all types to engage in increasingly risky transactions and to greatly expand the leverage of their balance sheets. As the crisis unfolds, credit continues to contract, the risk of bank failures increases, and the possibility of far more serious economic consequences become more apparent. The S&L crisis cost the taxpayers a few hundred billion, but this crisis has the potential of saddling the taxpayer with several trillion in bailouts.
"...because it allowed banks of all types to engage in increasingly risky transactions and to greatly expand the leverage of their balance sheets..."
Nonsense. They were starting to engage in these "risky transactions" prior to the 1999 bill. These risky transactions were make possible by changes made to loan standards by Clinton/Rubin to Fannie/Freddie prior to 1999. The deregulation bill made absolutely no changes to allow risky loans.
Those are DNC talking points. Not accurate, just DNC propaganda to try and deflect facts showing their extensive efforts blocking attempts by Republicans to stop the risky Fannie/Freddie loans created by Clinton to aid the CRA program.
Don't waste your time, you won't convince me. Im out right bipartisan on this issue. There were a lot of hands in the pot and it won't do much good to slap them now.
Agree there were a lot of hands in the pot. What bothers me is the failure to be honest about those that put the ingrediants in the pot and prevented any attempts to put a lid on the pot. How are we going to solve this mess if we don't look at how it happened honestly?
It's very scary to me considering the Democrats solution to this is to create a socialistic government and their method to accomplish it is to lie about what happened.
Considering how they all are trying to use him to justify this POS *bailout* ...
True and v good post. Check me tagline
effin Rubin and anarchist Dems
Not anarchist just for the sake of being anarchist (how romantic) but to get mega-bonuses for concocting toxic waste derivatives
True!
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