Taxpayers are still bailing out Wall Street, eight years later

Washington Post ^ | 07 November 2016 | Renae Merle

[Toddsterpatriot]

The crisis was caused by a government driven bubble created when banks were told to make (eventually they did it enthusiastically) to make questionable loans. They originated the loans and then dumped them into the GSE’s who packaged them as security instruments that were given high ratings. The rating agencies then used very questionable numbers based on suspect data and it kept growing until it blew up.

No argument here.

All I want is an accurate accounting of what happened.

You pretty much covered it above.

As far as what ended up on my kids you and I will apparently have to disagree.

Where do we disagree? The government lent TARP money to banks, financial firms, AIG, Fannie and Freddie. The money was repaid along with a profit of about $70 billion and counting.

[volunbeer]

I am not necessarily arguing about where the TARP went. However, it is beyond doubt that the government borrowed huge sums (for everything) after the crisis. The preventable crisis was used as an excuse to open the floodgates for additional deficit spending, a crony payback stimulus, and crushing debt on my children.

There is not a doubt in my mind that the deficit is far worse now than it would have been. I am more upset with our government than I am the banks. The banks appeared (to me at least) to be the vehicle that a select group of people used to blow the bubble up.

I enjoy your post and understand what you are saying in defense of the banks. I do believe the right thing would have been for the banks to sound the warning, but obviously there are other people who had that responsibility. I want people to be accountable for what turned out to be a complete disaster. It is healthy to have an “after action review” of things like this. It was never done. My personal opinion remains that it was primarily a politically created disaster more than blaming the banks. The banks are an easy target to blame.

I want accountability. I want to know why Barney Frank (one congressman) was able to thwart oversight from congress. I want to know why the GSE’s obviously were able to lie to congress about the health of their portfolio (and the liars got huge bonuses). I want to know why the people we pay to regulate the mortgage and banking industries did not sound the alarm. There are a lot of questions and answers would be a healthy thing. How much of this started with “affirmative action lending” that were imposed on banks with 100 times the scrutiny as the fraudulent testimony presented to congress?

In the final accounting in my mind - I mostly blame our politicians so we should lay it all out there so the American people understand the consequences when the oversight committees and executive branch fail to do their jobs.

P.S. - there should be no GSE’s - just a bad idea all the way around. If a bank makes a loan they should own it from start to finish or sell it to another private bank. My kids should never be responsible for a bum loan.