An accquaintance of mine on facebook recently commented, “first health insurance, now financial reform--brought to you by the same people who crashed the real estate market with fanny and freddie?!”
I must disagree, the people who crashed the real estate market and fanny/freddie were in the George W. Bush administration, not the current (Obama) administration. President Obama is trying hard, without any Republican support, to revamp and re-regulate the stock market, real estate, and speculative investment companies; if he achieves any true success, it will be without the assistance of any of those previously vaulted administration officials or their minions in Congress.
If you go back in history to the “Great Depression”, President Roosevelt had to invoke Presidental Authority to close the banks for 3 days, to allow enough time to implement his plans for government authorities to control and regulate the banks and investment/insurance companies. He broke them apart, told banks they could be banks, insurance companies they could provide insurance, and investment firms they could make investments, but the three could not work together to swindle the public out of money (my take on the process).
In these plans, he used the “best and brightest” from both sides of the aisle. Eccles and Marriot, both Republicans from Utah, were very high in his administration, and played a major part in the seperation of banks, investment, and insurance companies. These companies had to operate as separate, stand-alone businesses, they could not refer one customer to another desk and take profits therefrom. He was successfull, in that he took from the bankers/investment communities the abiltiy to make over-leveraged loans from banks on real estate in order for short-sighted consumers to purchase stocks, nor could the public short-sell stocks based on property valuations of the day.
While it may be argued that it took some time for his actions to make a positive effect, it cannnot be argued from a historical persepctive that these were in fact the correct moves to bring a halt to the depression.
So it is today. Over the last three decades, our government has worked to reduce regulation and increase co-dependant banking/investment/insurance/real estate companies. These steps, one at a time, have lead us to the financial collapse of this decade. Now the public outcry is for “more regulation”, and our government is trying to put this into place. Then, sadly enough, the pendulem will swing again, and we will have cries for less regulation, and we go off for a merry ride.
Actually Bob, it was the Clinton Administration who degregulated the lending so Fannie and Freddie could give big homes to people that couldnt afford it, in 2004 ( i think ) the Bush administration tried to regulate both fannie and freddie, but it was filibustered by Dodd and Barney Frank. Also Obama later said he supported the Filibuster. Let's also not forget that in July 2008 two months before the collapse, Barney Frank was on C-Span saying Freddie and Fannie were just fine and in no danger of collapsing. Why would Frank say that? Because Frank, Obama, and Dodd, and John Kerry were all HUGE receivers of campaign donations from Freddie and Fannie. Frank and his bunch arent going to regulate those companies when they are stuffing his pockets full of cash.
ReplyDeleteHere's my Proof : ARTICLE 1 FROM THE NY TIMES SEPT 30TH, 1999. Talks about the Clinton admin deregulating the market. this is a full year and half before Bush took office. Copy and Paste if link doesnt work.
http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html?scp=2&sq=fannie+mae&st=nyt
Article 2 is Sept 11, 2003 Talks about the Bush Administration attempts to regulate freddie and fannie. Again, just copy and paste if link doesnt work.
http://www.nytimes.com/2003/09/11/business/new-agency-proposed-to-oversee-freddie-mac-and-fannie-mae.html?scp=2&sq=fannie+mae&st=nyt
While you may have a point that Clinton started the decline of regulation over Freddie and Fannie (and I personally don't beleive you have a leg here, the decline in regulation over those twin sisters began under Reagan), you cannot argue, and did not argue, with the basic premise of my statements, that Roosevelt regulated for a reason and the deregulation that has follwed has been bad for the country. Honestly, the collapse of the markets happened under President George W. Bush's administration. the bailouts of financial instutitions began under Geroge W. Bush's administration.
ReplyDeleteYou both are right, but so what. Democrat, Republican. Both sides see huge political contributions. Deregulation was done for greed. Obama inherited a mess. I think we can all agree on that but nothing will be fixed unless the bulk of the money gets removed from politics. It has become so contaminated, so evil, Halliburton, BP, tobacco, drug companies. We now have it passed by the Supreme Court that large companies can pay lobbyists to fight for their interests. We don't stand a chance! So many layers of government, its in our local levels. See how politics play in your home town. Does anything get done except more taxes? Everything needs to be dismantled and started again but obviously thats not going to happen. I don't want to change our democracy, just start again so I could follow it and know who's side I need to be on. I hate the way the media reports now. How dirty compaigns have become. Ridiculous arguments are continually reharshed to deflect away from what really matters. Gays in the military? Abortion? Religion? Flag burning?! Such volitiIe issues used to deflect from the REAL issues. Personal issues that need to be decided personally. I don't want to loose my house because I get sick. I want to know after working my whole life AND contributing into a social security system that I'll have money. This is the first generation where our kids are worse off than their parents. Thats really scary for me and even scarey for my kids.......... they might have to take care of mom!
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