The blame game - PeachParts Mercedes-Benz Forum

mwood · #1 03-28-2009, 11:54 PM

Interesting read and pretty accurate IMO.

Now Can We Finally Be Honest About What Caused the Financial Meltdown?
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A really balanced look at the question:

I like the last one

Now that the election is over, can we finally be honest about what caused the housing crisis and the resulting financial meltdown? It’s really not rocket science. Here's what happened:

1. Thanks to Jimmy Carter and the Democrats, the Community Reinvestment Act (CRA) was passed, laying the groundwork for the feds to pressure banks to make risky loans to low-income people. Only a few of the bad home loans were from CRA-covered institutions, but CRA itself paved the way for the destructive federal pressure on banks that came later. BLAME: Democrats.

2. Republicans made things a lot worse by making it possible for bad home loans to cause a wider range of damage than they could cause otherwise, by pushing for the repeal of the Glass-Steagall Act. A very bad move. Most Democrats went along, but many expressed reservations in doing so. The repeal bill passed with a veto-proof majority, so Clinton signed it. The bill was largely the fault of the Republicans. They're the ones who pushed for it. BLAME: Republicans.

3. Under Bill Clinton, federal bureaucrats began to exert pressure on banks to make home loans to low-income people. It got to the point where banks could be penalized for not making enough home loans to low-income people. Had it not been for this pressure, very few high-risk loans to low-income folks would have been made, and we would not be in the mess we're in today. BLAME: Democrats.

4. Under Bush and Congressional Republicans, this disastrous policy continued, partly because GOP lawmakers wanted to help low-income Hispanics own homes. BLAME: Republicans.

5. But, to their credit, Bush and Congressional Republicans realized the disaster that was in the making at Freddie and Fannie, and repeatedly tried to impose tough oversight on those institutions. The Democrats blocked them every single time, claiming the GOP was just trying to keep minorities from owning homes. Although Freddie and Fannie don't make loans themselves, they do make it possible, through loan security and other means, for other institutions to make loans, and many/most of those loans were made to low-income people. So if tougher regulations had been imposed on Freddie and Fannie, the making of high-risk loans to low-income people, many of them minorities, would have been substantially curtailed, which was why the Democrats screamed "racism." BLAME: Democrats.

6. Freddie and Fannie used those bad home loans for mortgage-backed securities, and several huge private firms used them for default credit swaps (e.g., AIG). The Republicans failed to ensure that the default credit swaps were regulated. They had tried to do something about Freddie and Fannie bundling bad home loans for mortgage-backed securities, but they did nothing about the disastrous default credit swaps. Furthermore, Bush didn't make a big enough issue out of the need to reform Freddie and Fannie. He exerted a modest effort, but a full-court press was warranted. BLAME: Freddie and Fannie, Private Financial Giants, Consumers Who Bought Homes They Couldn't Afford.

7. When those high-risk home loans began to go into default, all the investments that were based on them lost most of their value, costing our economy trillions of dollars.

That's it. That's exactly what happened. If you can't admit this, then you are blinded by partisan politics and/or ideology.

Chas H · #2 03-28-2009, 11:59 PM

When the lights go out there those that curse the darkness and there are those that look for a lantern.

cmac2012 · #3 03-29-2009, 12:03 AM

No wait, Sean Hannity says it's all the fault of Fannie and Freddie and the demos. He couldn't be wrong on that, could he?

The analysis isn't bad, I go along with most of it, but you didn't mention the bill that superseded Glass-Steagall Act, the Gramm-Leach-Bliley thingy, which paved the way for a lot of banking shenanigans.

mwood · #4 03-29-2009, 12:13 AM

Sorry if you don't think the analisys is complete, I didn't put it together, I just thought it was interesting and balanced. The Hannity reference is out of left (literally) field though. Why do you feel the need to go there?

Botnst · #5 03-29-2009, 12:39 AM

Quote:

Originally Posted by mwood

Sorry if you don't think the analisys is complete, I didn't put it together, I just thought it was interesting and balanced. The Hannity reference is out of left (literally) field though. Why do you feel the need to go there?

Telepathy does that to an ordinary person.

cmac2012 · #6 03-29-2009, 12:58 AM

Quote:

Originally Posted by mwood

Sorry if you don't think the analisys is complete, I didn't put it together, I just thought it was interesting and balanced. The Hannity reference is out of left (literally) field though. Why do you feel the need to go there?

Are you kidding? Repos of all stripes buy into exactly that. Looking hard for a way to pin all the blame on the dreaded demos.

The bit you posted is far more balanced than the tack taken by the rabid righties.

Limbaugh and Hannity are going to take the Republican party into the dustbin with them.

cmac2012 · #7 03-29-2009, 12:59 AM

Quote:

Originally Posted by Botnst

Telepathy does that to an ordinary person.

Dude, dude . . . you're embarrassing yourself.

kknudson · #8 03-29-2009, 01:12 AM

And will they ever learn. I can find the link if needed.

There is a bank out east that was dinged on their FDIC report for having NO bad loans.
THIS WAS RECENTLY WITHIN THE PAST 90 Days.

Here is a bank doing what a bank is supposed to do, and the FDIC writeup critisized(?) them for not having any bad loans.

OH and they have a higher than average loan ratio, ie they have loaned more of their assets than comparatively sized banks.

AND as I repeatedly have stated Don't try to blame the Dems, Don't try to blame the Repubs.

BLAME THE POLITITICIANS PERIOD.

mwood · #9 03-29-2009, 01:14 AM

Quote:

Originally Posted by cmac2012

Are you kidding? Repos of all stripes buy into exactly that. Looking hard for a way to pin all the blame on the dreaded demos.

The bit you posted is far more balanced than the tack taken by the rabid righties.

Limbaugh and Hannity are going to take the Republican party into the dustbin with them.

Why take right back to a party driven arguement? The point is that there is culpability across party lines. There is no bias in the OP, why try to take it there? So a right winger will jump in and throw blame at the left and start the merry-go-round all over again? Everybody should admit that EVERYBODY is to blame and move on to a solution.

cmac2012 · #10 03-29-2009, 02:13 AM

Touchy, touchy. I was sorta pointing out that the OP is much more balanced than the Hannities of the world.

Of course, I'm glad you would never descend to partisanry.

Medmech · #11 03-29-2009, 06:33 AM

Quote:

Originally Posted by cmac2012

Dude, dude . . . you're embarrassing yourself.

How do you know?

RichC · #12 03-29-2009, 06:41 AM

How about adding into the equation the high gas prices that people had to pay.

Causing them to not have the money needed to pay credit card loans.

Then the card company jacking up the intrust rates to insane amounts.

Causing bankruptsy.

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I truly think many people got shafted by predatory lenders.

And strung along by their own greed.

OMEGAMAN · #13 03-29-2009, 11:21 AM

Quote:

Originally Posted by RichC

How about adding into the equation the high gas prices that people had to pay.

Causing them to not have the money needed to pay credit card loans.

Then the card company jacking up the intrust rates to insane amounts.

Causing bankruptsy.

--------------------------------

I truly think many people got shafted by predatory lenders.

And strung along by their own greed.

I agree! Just the other day a mortgage lender kick the door of my house open and held a gun to my head so I was forced to sign a mortgage.
Then the next day the credit car company did the same thing so now I have a bunch of crap I dont need.
Oh yeah I almost forgot Dick Cheyny was driving the get away car.

mwood · #14 03-29-2009, 11:33 AM

Predatory lending sounds like such BS to me. It makes the people who fell for the crazy interest only loans or the variable rates they could hardly afford at their lowest point sound like innocent sheep being hunted by wolves.

Brian Carlton · #15 03-29-2009, 11:37 AM

Quote:

Originally Posted by mwood

Predatory lending sounds like such BS to me. It makes the people who fell for the crazy interest only loans or the variable rates they could hardly afford at their lowest point sound like innocent sheep being hunted by wolves.

It's not total BS. Many Americans cannot understand basic arithmetic. To expect them to understand a variable rate loan that climbs from 2% to 4%........effectively doubling their payments.........is entirely unrealistic.

Sure, it's their responsibility to understand what they sign.......but, unfortunately, if that was actually occurring, we wouldn't be in the current situation.