I'll explain this simply: I'm a root cause analysis guy. Who caused the problem? Politicians advancing their vision of a social agenda. That same social agenda designed to create a permanent voting block to keep them in power, doling out government goodies to the moochers of our society, at the expense of those of us who work and produce.
Simply stated, remove the root cause of the problem so it never happens again. We disagree on who the real target should be.
You are concentrating on the subprime issue caused by government instructing banks to loosen their loan requirements to help poor and disadvantage. Coupled with Fannie Mae and Freddie Mac, CRA and ACORN people who were not qualified for loans contributed to the financial meltdown. However not all collapsed mortgage loans were subprime in nature. There many banking CEO’s who wanted to meet their earning requirements for bonuses by pumping up earnings in a short time by accepting many loans as possible (earnings are thru fees and points). They did that by instructing mortgage orginators and underwriting departments not to verify the loan applicant’s info, and even encourage lying on the loan application for conventional mortgage loans. So far that is not illegal because the bank is risking itself with bad loans, the fraud occurs when these loans are bundled and the rating agencies give it a AAA rating and sold into the after market. This act IS FRAUD.
True your proposals may eliminate future fraud, but letting the fraudster get away with it will not solve the problem either. One thing about government regulations, it cannot account for every scheme possible, if such regulations existed no one in this country can conduct business. These fraudster will find another way to get around Glass Steagall or worst outright violate the act on a wide scale hoping they become too big to fail to nullify any government attempt to punish them. The only way to solve this is to eliminate this generation of fraudster, because the young ones down the road will become the middle managers or worst CEO’s, and since they survived current crisis richer and not prosecuted, they will be emboden to repeat the scheme. We barely survived this collapse, the next time we may not be too lucky. Remember what happen to Gov Huckabee when he got soft and let one criminal get away, four police officers are dead because of it. We barely survived this collapse, the next time we may not be too lucky. The last thing I need twenty years from now is find out we had a melt down caused by a banking CEO who began his career as a mortgage originator that made sale man of the year via liar loans in 2008.