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Thread: The real culprits in this meltdown

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    Silver Member crawdad's Avatar
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    Default The real culprits in this meltdown

    The Real Culprits In This Meltdown
    By INVESTOR'S BUSINESS DAILY | Posted Monday, September 15, 2008 4:20 PM PT
    Big Government: Barack Obama and Democrats blame the historic financial turmoil on the market. But if it's dysfunctional, Democrats during the Clinton years are a prime reason for it.


    Obama in a statement yesterday blamed the shocking new round of subprime-related bankruptcies on the free-market system, and specifically the "trickle-down" economics of the Bush administration, which he tried to gig opponent John McCain for wanting to extend.

    But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street's most revered institutions.

    Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.

    The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but "predatory."

    Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the '90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.
    And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America.

    As soon as Clinton crony Franklin Delano Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud.

    Other Clinton cronies, including Janet Reno aide Jamie Gorelick, padded their pockets to the tune of another $75 million.

    Raines was accused of overstating earnings and shifting losses so he and other senior executives could earn big bonuses.

    In the end, Fannie had to pay a record $400 million civil fine for SEC and other violations, while also agreeing as part of a settlement to make changes in its accounting procedures and ways of managing risk.

    But it was too little, too late. Raines had reportedly steered Fannie Mae business to subprime giant Countrywide Financial, which was saved from bankruptcy by Bank of America.

    At the same time, the Clinton administration was pushing Fannie and her brother Freddie Mac to buy more mortgages from low-income households.

    The Clinton-era corruption, combined with unprecedented catering to affordable-housing lobbyists, resulted in today's nationalization of both Fannie and Freddie, a move that is expected to cost taxpayers tens of billions of dollars.

    And the worst is far from over. By the time it is, we'll all be paying for Clinton's social experiment, one that Obama hopes to trump with a whole new round of meddling in the housing and jobs markets. In fact, the social experiment Obama has planned could dwarf both the Great Society and New Deal in size and scope.
    There's a political root cause to this mess that we ignore at our peril. If we blame the wrong culprits, we'll learn the wrong lessons. And taxpayers will be on the hook for even larger bailouts down the road.

    But the government-can-do-no-wrong crowd just doesn't get it. They won't acknowledge the law of unintended consequences from well-meaning, if misguided, acts.

    Obama and Democrats on the Hill think even more regulation and more interference in the market will solve the problem their policies helped cause. For now, unarmed by the historic record, conventional wisdom is buying into their blame-business-first rhetoric and bigger-government solutions.

    While government arguably has a role in helping low-income folks buy a home, Clinton went overboard by strong-arming lenders with tougher and tougher regulations, which only led to lenders taking on hundreds of billions in subprime bilge.

    Market failure? Hardly. Once again, this crisis has government's fingerprints all over it.




    - The Real Culprits In This Meltdown

    This was on another board and I thought this might shed some light on some other threads.

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    crawdad

    i am surprised the left-wingers have not jumped on your case yet?

    i watched the hearings about this subject on C-SPAN

    they love big government, hate successful people, hate people with right leaning views

    blame george bush for everything

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    Elite Member Grimmlok's Avatar
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    Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.
    I love this, this is what I do for a living.

    This is really hilarious. Clinton brought in the EXACT REGULATIONS needed to AVOID these high-risk, no accountibility investment vehicles. He slammed the lid down on them. What happened after that, is that guy from UBS Financial (about to go tits up) who, amazingly, called americans "whiners" (and is John McCain's economic advisor) when it came to matters of the economy going down the tubes, was one of the lobbyists responsible for geting RID of those regulations, and demanding less regulation period as well as a draw down of lender accountibilty and oversight. ie, 'let industry self regulate'

    Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the '90s by Clinton and his social engineers.
    Ahhh here we go. THis is where they try to blame Biww Cwinton for all the woes.

    No, it had nothing to do with the Republicans in office (McCain being one of the prime movers and shakers) heeding the advice of Mr. UBS and his powerful lobby friends, and tossing out the very regulations needed to prevent this disaster... no, it's ALL BILL CLINTONS FAULT for helping less fortunate people get houses in a responsible, regulated manner. The regulations to keep this shit from happening were in place when said socially conscious program was revitalized, hence heading off any disaster as they were intended to do by design. However, that was not to last because republicans are fucking retards.

    Enter Bush, early 2000's who summarily did away with said stringent regulations, thanks to Mr UBS Financial Working On McCains Campaign, and adopted the "let industry self regulate" mantra instead. As I've stated time and again, INDUSTRY DOES NOT SELF REGULATE. They will always do the shortsighted, idiotic short-term gain thing, as evidenced by Wall Street's stupidity in investing in these shitty, UNREGULATED loans using high risk investment vehicles, aka hedge funds.

    Didn't anybody think it fucking weird that house prices rose astronomically, and yet people were able to over-extend themselves, AT THE BEHEST OF BANKS i might add? Why is this crash such a surprise to supposedly well informed, financial people? I could have told you this 5 years ago!

    Give me a fucking break. It was the absolute REPUBLICAN DRIVEN deregulation and "let industry look after itself" nonsense that led to this. Before Bush, the checks were in place. After Bush, economic meltdown.

    Oh, and also, trickle-down economics DOES NOT WORK. The rich do not let their wealth trickle down. They hoard it obsessively, work to expand it the cheapest way possible (hello, migrant workers) and NONE of that savings is ever passed on, and nor does it stimulate the fucking economy.

    It didn't under reagan, thatcher, bush 1 or 2. fully 30-40 years of that stupid theory and people are STILL trying after it's failed for that long.

    Fuck people are stupid.
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    Quote Originally Posted by Jessica View Post
    crawdad

    i am surprised the left-wingers have not jumped on your case yet?

    i watched the hearings about this subject on C-SPAN

    they love big government, hate successful people, hate people with right leaning views

    blame george bush for everything
    I lean to the left and I have absolutely nothing against success. But I do believe that you can be successful and still have a heart and care about the common good and reflect it in social and economic policies. As for the old big government is bad refrain, the current meltdown, just like the savings and loans meltdown some years ago, is a result of BAD government, not big govt.

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    Quote Originally Posted by Grimmlok View Post
    What happened after that, is that guy from UBS Financial (about to go tits up) who, amazingly, called americans "whiners" (and is John McCain's economic advisor) when it came to matters of the economy going down the tubes, was one of the lobbyists responsible for geting RID of those regulations, and demanding less regulation period as well as a draw down of lender accountibilty and oversight. ie, 'let industry self regulate'
    Yeah, that'd be Phil Gramm, aka 'Foreclosure Phil.'

    This article is ridiculous as it doesn't even mention Alan Greenspan, someone who was responsible for fiscal policy after 2000.

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    But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street's most revered institutions.
    That is such a laughably stupid comment that I'm not sure where to begin.

    First, Clinton hasn't been in office for almost 8 years - and the housing boom hadn't even started when he left.

    Second, Clinton had tried to get more regulation for the markets, but was hampered by most Republicans and few Dems (like Joe Lieberman).

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    Hit By Ban Bus! AliceInWonderland's Avatar
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    i blame the hip-hop culture!






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    Blame Canada.

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    It's all traceable back to Glass Steagall....

    The repeal of which was sponsered by Phil Graham, signed into law by a repub congress and Bill Clinton....Thats why this was all deregulated.......

    People better read up and realize that this wasn't a one party effort and was in play and coming long before Bush.....The blame is shared.
    Last edited by witchcurlgirl; September 17th, 2008 at 11:10 AM.
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    um ok, i highly doubt we can blame one thing/person/event and who cares about blame right about now! thats not going to solve anything. we need solutions and quick!

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    Elite Member Sweetie's Avatar
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    I blame the Jolie-Pitts and their airplane.

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    That's the most sensible thing I've read about this whole situation.
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    Elite Member lurkur's Avatar
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    The minorities did it????? Who knew!!??

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    I blame edited out cheap personal shot at Craw and several others here...

    ...oh, and the Republicans.

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    Quote Originally Posted by witchcurlgirl View Post
    People better read up and realize that this wasn't a one party effort
    Thank you!

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