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Deregulation killed our economy

Mathematician

Reason, and reason again
Market fundamentalists are grasping at straws with the CRA. Most of the provisions were not forced. It was more of a show than actual legislation.


http://www.house.gov/apps/list/hearing/financialsvcs_dem/barr021308.pdf
http://www.bis.org/publ/work259.pdf?noframes=1
Its Still Not CRA | New America Blogs


The Depository Institutions Deregulation and Monetary Control Act (1980) and the Gramm-Leach-Bliley Act (1999) are more at fault for deregulating the industry. The Garn-St. Germain Depository Institutions Act of 1982 specifically allowed adjustable rate mortgages.

Deregulation killed our economy. It's time to kill Reagonimics once and for all.
 
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Jeremy Mason

Well-Known Member
Market fundamentalists are grasping at straws with the CRA. Most of the provisions were not forced. It was more of a show than actual legislation.

The Depository Institutions Deregulation and Monetary Control Act (1980) and the Gramm-Leach-Bliley Act (1999) are more at fault for deregulating the industry. The Garn-St. Germain Depository Institutions Act of 1982 specifically allowed adjustable rate mortgages.

Deregulation killed our economy. It's time to kill Reagonimics once and for all.

True, the American people need to learn how a few selfish men are controlling Congress.
 

UnityNow101

Well-Known Member
Where are all of the free market, no regulatory oversight supporters now? They have lost their ability to speak for such as they have given in to legislation which goes against the very grain of their principles which they hold so dear. The rot goes deeper then just old Ronald Reagan, as we know that Bill Clinton signed the Gramm/Leach/Bliley Act and the congressional oversight by both democrats and republicans was lax to say the least...
 

Valjean

Veteran Member
Premium Member
This keeps happening over and over again. A business convinces the legislature to cut it some slack and next thing you know it's grown into a predatory monster and/or monopoly.

Government's job is to regulate; to provide an even playing field; to promote the public welfare.
As long as legislator's jobs are dependent on corporate "contributions" our government will be in the pocket of corporate interests.
 

3.14

Well-Known Member
goverment: this is the sqaure boxs you can stay in
corporation: can we atleast have a door?
goverment: uhm.. wel ok then
corporation: opens door and expandes past the box
 

Alceste

Vagabond
Where are all of the free market, no regulatory oversight supporters now?

They ones in government have just signed a $700B bill to divert public funds into the still unregulated financial markets. The free market profiteers in the private sector are only silent because they busy are lining up for handouts at the newly established corporate welfare feeding trough.
 

Dunemeister

Well-Known Member
They ones in government have just signed a $700B bill to divert public funds into the still unregulated financial markets. The free market profiteers in the private sector are only silent because they busy are lining up for handouts at the newly established corporate welfare feeding trough.

The American people should have held out for better. Specifically, they should have told Congress to fashion a bailout designed to help those mortgage-holders who could no longer foot the bill due to accident, disease, or loss of work. Now THAT would be a bailout worth voting for. As for the companies -- screw 'em.
 

Troublemane

Well-Known Member
SUH-POSEDLY....by bailing out wall street, by buying these bad loans, the govt is going to ...MAYBE... make back some of its money as the market improves. The hope is that this keeps our economy from sliding further into [recession], but I gotta say, the same exact business models has been used by the large corporations over the past decade in order to cook their books, and make it seem they are doing better than they really are. By laying off people and moving money around so it looks as if they are making money--(thus justifying the CEO's insane paychecks). So, basically we are applying the exact same model to the banks, in the hope that we can shore them up long enough for the markets to stabilize on their own.

Its amazing to hear myself say this,...but this is the perfect time for a massive tax increase on capital gains. The only way we are going to recoup this money is if we stick it to wall street the way they stuck it to us. :D
 
A

angellous_evangellous

Guest
Have no fear - there is little more for McCain to destroy if he's elected.
 

Valjean

Veteran Member
Premium Member
So far I haven't heard of any provisions in this legislation to directly address the economic problems of the middle and working classes. This, in my opinion, is what we should be focusing on. I doubt if the bankers are going to miss any meals no matter what happens.

The situation is reminiscent of a scene from Blazing Saddles. The Robber Barons are holding a gun to their collective head and threatening to shoot if congress doesn't cover their criminal losses.
 

The Voice of Reason

Doctor of Thinkology
I cannot say (unequivocally) that a Congress run by Democrats (filibuster proof), and a Democratic president will definitely reinstate the oversight and regulations that were removed from the equation - but I can say that, without a doubt, I don't trust the Republicans to do so.
 

Wandered Off

Sporadic Driveby Member
Deregulation makes an easy target, but I think the story is a little more complicated. The government charters two huge agencies to offer incentives the market would not, and they grow so much that they are considered 'too big to fail.' I think this notion that organizations must not be allowed to fail is as big a problem as deregulation. People in such organizations feel free to engage in all sorts of risky schemes to expand their size, because they know they have this safety net. If they knew they would be forced to face market consequences proportionate to the risks they took, I'm fairly certain they would have been much more cautious.

Deregulation certainly can contribute, but its effects are massively magnified in an environment where managers are protected from failure. Their confidence in being bailed out appears well placed.
 

gnomon

Well-Known Member
I agree with WanderedOff.

People keep saying deregulation did it but they cannot really point it out. The links did discuss the easing of lending standards and the other link discussed why many of the loans that the Treasury wants to buy were necessary loans and thus they are not to blame but......

still seems pretty lacking on informative information to make a case about deregulation. Especially considering the fact that regulations existed as well as regulatory agencies and commissions, albeit useless, existed as well.

In fact it was one of those useless organizations to regulate the GSE's that finally pushed back hard enough resulting in hearings on the accounting practice of those GSE's as well as the removal of both CEO's of Fannie Mae and Freddie Mac. A regulatory agency whose investigation was not only failed to receive support of the Democratic party but also opposed by them with ranking members, like Frank and Waters, deriding the whole process as well. They wanted the governments hands off the GSE's.

Now that doesn't lay blame on them for the crisis in my opinion but their behavior plus their more than apparent hypocrisy in dealing with it now shows to me that blaming the Republicans for this mess is absurd, misleading and serves no good will for the people at all.

That's way I distrust all of them.
 

Mathematician

Reason, and reason again
Deregulation makes an easy target, but I think the story is a little more complicated. The government charters two huge agencies to offer incentives the market would not, and they grow so much that they are considered 'too big to fail.' I think this notion that organizations must not be allowed to fail is as big a problem as deregulation. People in such organizations feel free to engage in all sorts of risky schemes to expand their size, because they know they have this safety net. If they knew they would be forced to face market consequences proportionate to the risks they took, I'm fairly certain they would have been much more cautious.

Deregulation certainly can contribute, but its effects are massively magnified in an environment where managers are protected from failure. Their confidence in being bailed out appears well placed.

Corporate welfare is one of the main culprits. There should be no government assistance to companies, only people. And there should be no corporate charters. If you want limited liability, you have to convince private banks to buy liability insurance.
 

Mathematician

Reason, and reason again
More:

McClatchy Washington Bureau | 10/11/2008 | Private sector loans, not Fannie or Freddie, triggered crisis

WASHINGTON — As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail.
Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.
Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.
Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height vrom 2004 to 2006.
Federal Reserve Board data show that:
_ More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
_ Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
_ Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.
 
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