Dems Are To Blame For Financial Crisis

[Shady]

If anyone still questions the Democratic culpability in the current financial crisis, look no further than Congressional debate from 2004, thanks to C-SPAN via YouTube.

Maxine Waters (D-CA): Through nearly a dozen hearings, we were frankly trying to fix something that wasn’t broke. Mr. Chairman, we do not have a crisis at Freddie Mac, and particularly at Fannie Mae, under the outstanding leadership of Franklin Raines. [Raines would barely avoid prosecution for fraud.]

Gregory Meeks (D-NY): … I’m just pissed off at OFHEO [the regulators trying to warn Congress of insolvency at the GSEs], because if it wasn’t for you, I don’t think we’d be here in the first place. … There’s been nothing that indicated that’s wrong with Fannie Mae, Freddie Mac has come up on its own … The question that then comes up is the competence that your agency has with reference to deciding and regulating these GSEs.

Lacy Clay (D-MO): This hearing is about the political lynching of Franklin Raines.

Barney Frank (D-MA): I don’t see anything in this report that raises safety and soundness problems.

YouTube

[Shady]

Oh, and President Clinton sums it up perfectly at the end of the video!

[GostHacked]

And McCain thinks the fundamentals of the ecomony are strong. I guess he is a Democrat as well.

[GostHacked]

http://money.cnn.com/2008/09/29/news/econo...dex.htm?cnn=yes

The measure needs 218 votes for passage. Democrats voted 141 to 94 in favor of the plan, while Republicans voted 65 to 133 against. That left the measure with 206 votes for and 227 against.

Yeah, it's all the Dems fault.

Both parties are to blame for the current crisis.

[peter_puck]

If anyone still questions the Democratic culpability in the current financial crisis, look no further than Congressional debate from 2004, thanks to C-SPAN via YouTube.

Maxine Waters (D-CA): Through nearly a dozen hearings, we were frankly trying to fix something that wasn’t broke. Mr. Chairman, we do not have a crisis at Freddie Mac, and particularly at Fannie Mae, under the outstanding leadership of Franklin Raines. [Raines would barely avoid prosecution for fraud.]

Gregory Meeks (D-NY): … I’m just pissed off at OFHEO [the regulators trying to warn Congress of insolvency at the GSEs], because if it wasn’t for you, I don’t think we’d be here in the first place. … There’s been nothing that indicated that’s wrong with Fannie Mae, Freddie Mac has come up on its own … The question that then comes up is the competence that your agency has with reference to deciding and regulating these GSEs.

Lacy Clay (D-MO): This hearing is about the political lynching of Franklin Raines.

Barney Frank (D-MA): I don’t see anything in this report that raises safety and soundness problems.

YouTube

Dam, you are right, it was their fault. Just like the Sponsorship scandal was Brian Mulroney's fault (he promoted Chuck Guite).

With your twisted logic and taking quotes out of context, I could probably prove anything.

Some things to think about:

Did any of the above people have any real power during the housing bubble ? (Republicans had majority control of the Senate/House and executive branch). The comments of the above people were only really commentary.

Were the quotes above in any way related to the housing bubble/credit crisis ? No, they were really part of the previous accounting scandal. The debate was about the behavior of Franklin Raines. If the housing bubble was about the accounting methods of Franklin Raines, it would be over by now.

You are taking quotes from one debate and inserting them into another. It makes about as much sense as blaming the Democrats for Iraq by picking up quotes from the first Iraq war.

[peter_puck]

remove double post

Edited September 29, 2008 by peter_puck

[White Doors]

http://money.cnn.com/2008/09/29/news/econo...dex.htm?cnn=yes

Yeah, it's all the Dems fault.

Both parties are to blame for the current crisis.

ummm... that's not the crisis. That's the stalemate on a so-called 'cure'.

A cure that should not happen in my opinion.

Let the weak perish and the strong get stronger. Let's not reward stupidity.

[GostHacked]

ummm... that's not the crisis. That's the stalemate on a so-called 'cure'.

A cure that should not happen in my opinion.

Let the weak perish and the strong get stronger. Let's not reward stupidity.

There is no cure yet, it has to be administered to be effective. But I agree with you. Let the weak perish. I do think that the bailout would contribute to the same environment they have now. Greed is quite powerful. This bails out those big wigs and not the people who lost their homes due to stupid business practices of those big wigs.

[peter_puck]

There is no cure yet, it has to be administered to be effective. But I agree with you. Let the weak perish. I do think that the bailout would contribute to the same environment they have now. Greed is quite powerful. This bails out those big wigs and not the people who lost their homes due to stupid business practices of those big wigs.

If this would just result in the weak perishing, I would be happy to watch em burn. The problem is the weak got golden parachutes while the strong are having a hard time finding credit.

The bottom lines is that the banking system is what holds up the economy. Thats why they should be one of the few industries with heavy regulation - you can't let banks fail. Failing to regulate them was the first mistake, allowing a banking crisis would be the second. $700 billion is nothing compared with what the market lost in the last few hours. It would be a mere fraction of the cost of a severe recession.

[Oleg Bach]

If this would just result in the weak perishing, I would be happy to watch em burn. The problem is the weak got golden parachutes while the strong are having a hard time finding credit.

The bottom lines is that the banking system is what holds up the economy. Thats why they should be one of the few industries with heavy regulation - you can't let banks fail. Failing to regulate them was the first mistake, allowing a banking crisis would be the second. $700 billion is nothing compared with what the market lost in the last few hours. It would be a mere fraction of the cost of a severe recession.

That's the truth - the weak do get the big bonus package. The strong and honourable work for a living wage and maybe a bit more. Good men and woman are not welcomed into corporate society. You really can't blame the politicals on this one. Most politicans don't have a clue how the system works. What really happened it that the corporate world became so complex that it was un-manageable - and there were few wise and honourable overseers to keep things in check. So plundering of the store took place - we were robbed by idiots because there were simply to many of them to keep track of - AND collectively like maggots they at the system from within.

[sharkman]

And McCain thinks the fundamentals of the ecomony are strong. I guess he is a Democrat as well.

Obama was quoted as saying the exact same thing today, so does that prove McCain right?

[GostHacked]

Obama was quoted as saying the exact same thing today, so does that prove McCain right?

Might prove that both of them have no clue what they are talking abut.

[Shady]

The bottom lines is that the banking system is what holds up the economy. Thats why they should be one of the few industries with heavy regulation - you can't let banks fail. Failing to regulate them was the first mistake, allowing a banking crisis would be the second.

Banks are regulated. Even Fannie and Freddie are regulated. Unfortunately, if you watch the C-Span video, the Dems decided to attack the regulators and their report, instead of accepting the fact that both those entities needed a new regulatory system, because the old one wasn't working. It's plain as day in the video.

Exhibit A:

Gregory Meeks (D-NY): … I’m just pissed off at OFHEO [the regulators trying to warn Congress of insolvency at the GSEs], because if it wasn’t for you, I don’t think we’d be here in the first place. … There’s been nothing that indicated that’s wrong with Fannie Mae, Freddie Mac has come up on its own … The question that then comes up is the competence that your agency has with reference to deciding and regulating these GSEs.

Edited September 30, 2008 by Shady

[peter_puck]

Banks are regulated. Even Fannie and Freddie are regulated. Unfortunately, if you watch the C-Span video, the Dems decided to attack the regulators and their report, instead of accepting the fact that both those entities needed a new regulatory system, because the old one wasn't working. It's plain as day in the video.

Exhibit A:

Gregory Meeks (D-NY): … I’m just pissed off at OFHEO [the regulators trying to warn Congress of insolvency at the GSEs], because if it wasn’t for you, I don’t think we’d be here in the first place. … There’s been nothing that indicated that’s wrong with Fannie Mae, Freddie Mac has come up on its own … The question that then comes up is the competence that your agency has with reference to deciding and regulating these GSEs.

I believe I replied to those quotes before. Even if those quotes were about the issue we are facing today (which they aren't), and even if the people making those statements actually had any power (they didn't - it was during a Republican majority), this is not a just a Fannie and Freddie problem. We have banks failing all over the planet. There are problems with asset backed paper and now credit cards.

The problem was that people were allowed to cheat the system with a wink and a nod from the government. "liar loans" were just that --FRAUD. How many mortgage lenders were prosecuted for that ? How many of this no income housing moguls were prosecuted ?

Why the heck didn't somebody pass a law against these no-doc mortgages ?

It is not like it flew under that radar. People new this was a bubble for years.

The reason nobody in power (ie BUSH) did anything about it was he was the main beneficiary. Take away the housing bubble and he would have one of the worst economic records since Carter (or even before).

The people in power could have banned no doc loans. They could have tightened mortgage restrictions. The could have actually prosecuted the people involved in the fraud. The reason they didn't was they were part of the game. The little trust fund baby was not going to go down like his father - who faced a recession, told the truth and got turfed for it.

[August1991]

If anyone still questions the Democratic culpability in the current financial crisis, look no further than Congressional debate from 2004, thanks to C-SPAN via YouTube.

I don't know if I would blame the Democrats for the problems at Fannie Mae and Freddie Mac.

But I do think that it's wrong to blame deregulation for the problems. I think all can agree that this is a problem of government oversight so it seems odd that we should now seek the government for a solution.

The Democrats are wrong in claiming that financial services deregulation is to blame for the current financial crisis--if anything, the financial sector has seen increased regulation since the savings and loan collapse in the 1980s. The lax supervision of Fannie Mae and Freddie Mac, which Republicans sought to strengthen in 2005, is the true culprit of this financial crisis.

In the debate on September 26, Democratic presidential nominee Barack Obama argued that the current crisis in the financial markets is the result of Republican deregulation.

The advertising from his campaign has been saying the same thing, and this claim is becoming a fixed element in the talking points of Democratic candidates this year.

Link

This article too is a good read (A Letter to My Friends on the Left):

In the last week or two, I have heard frequently from you that the current financial mess has been caused by the failures of free markets and deregulation. I have heard from you that the lust after profits, any profits, that is central to free markets is at the core of our problems. And I have heard from you that only significant government intervention into financial markets can cure these problems, perhaps once and for all. I ask of you for the next few minutes to, in the words of Oliver Cromwell, consider that you may be mistaken. Consider that both the diagnosis and the cure might be equally mistaken.

Consider instead that the problems of this mess were caused by the very kinds of government regulation that you now propose.

Link

----

Bad government regulations applied as much by Democratic as Republican administrations sowed the seeds of this crisis. Once housing prices began to fall, the crisis took form. At this point, it has gone beyond merely being a problem in mortgages. The financial system requires trust and people are now afraid and confused.

Edited October 1, 2008 by August1991

[msj]

This crisis has roots going back decades: deregulation, no regulation of hedge funds and derivatives, easy monetary policy and a Fed/Government always willing to bail out the latest bubble du jour with yet easier money without any consideration for moral hazard.

This encompasses Democrats controlling the house/congress/senate and presidency.

It also encompasses Republicans controlling these same institutions (and the Federal Reserve).

So, for the sake of trying to claw the world out of this mess, stop being so damned partisan and look at the facts as presented by the people who have been calling for these type of events to happen in the first place.

Read Nouriel Roubini who, unfortunately, has been a Cassandra of the economics world.

Read John Mauldin (he's a Republican you know, for those who think such things matter ), Calculated risk, Barry Ritholtz, Brad Setser, etc...

Then maybe we can have an intelligent discussion on this crisis - it's causes and it's resolution.

Edited October 1, 2008 by msj

[peter_puck]

This crisis has roots going back decades: deregulation, no regulation of hedge funds and derivatives, easy monetary policy and a Fed/Government always willing to bail out the latest bubble du jour with yet easier money without any consideration for moral hazard.

This encompasses Democrats controlling the house/congress/senate and presidency.

It also encompasses Republicans controlling these same institutions (and the Federal Reserve).

The crisis may have roots going back decades, but the tree sprouted during the Bush administration and they did nothing about it. They did nothing about it for political reasons. It hid the rot inside the economy (the rot itself was really nobodys fault)

In Canada, income trusts got out of control. The governments at the time (both Liberal and Conservative) dealt with the problem. In Ontario, mortgage laws that had been on the books for years all of a sudden became a tool for crooks. The government reacted.

In the US the government failed to react because the bubble allowed the administration to lie to an ignorant public about the true state of the economy.

Both Carter (though it is a massive partisan stretch to blame any of this on him) or the Republicans who pushed for deregulation had no idea this would happen when the passed the laws. Bush saw it happening and did nothing.

[bush_cheney2004]

...In the US the government failed to react because the bubble allowed the administration to lie to an ignorant public about the true state of the economy.

Bullcrap.....you have citations for this? You know exactly that which did and did not happen at Congressional hearings and Treasury?

Both Carter (though it is a massive partisan stretch to blame any of this on him) or the Republicans who pushed for deregulation had no idea this would happen when the passed the laws. Bush saw it happening and did nothing.

You're just talking out of your anti-Bush ass.....come back with some facts about how NINJA loans happened, including the Community Reinvestment Acts.

Edited October 1, 2008 by bush_cheney2004

[peter_puck]

You're just talking out of your anti-Bush ass.....come back with some facts about how NINJA loans happened, including the Community Reinvestment Acts.

The Community Reinvestment Acts may have prevented "red lining" among major banks, forcing them to lend more to the ghetto than they wanted, but there were all sorts of other companies that specialized in these types of loans because there was big money in it, not because they were forced to. Besides, the retail banks are holding up rather well compared to the investment banks.

Was there a housing bubble full of lousy loans during the Carter administration ? NO. How about the Regan, Bush I, Clinton? NO! Did any of those administrations do anything about this obvious problem? NO

Only one president since Carter had a giant housing bubble. That president did nothing to stop it.

What next, are you going to blame gun violence on the Chinese for inventing gun powder? I bet you would if Bush said it. :-)

[bush_cheney2004]

The Community Reinvestment Acts may have prevented "red lining" among major banks, forcing them to lend more to the ghetto than they wanted, but there were all sorts of other companies that specialized in these types of loans because there was big money in it, not because they were forced to. Besides, the retail banks are holding up rather well compared to the investment banks.

In other words, you can't exclude this as a factor.

Was there a housing bubble full of lousy loans during the Carter administration ? NO. How about the Regan, Bush I, Clinton? NO! Did any of those administrations do anything about this obvious problem? NO

Yes there were...see Savings and Loan Crisis.

Only one president since Carter had a giant housing bubble. That president did nothing to stop it.

Why would the president stop a housing bubble?

What next, are you going to blame gun violence on the Chinese for inventing gun powder? I bet you would if Bush said it. :-)

This doesn't make any sense.....Bush didn't start the wave of deregulation.

[GostHacked]

Yes there were...see Savings and Loan Crisis.

Keaton 5, McCain .. hearings .. blah blah.

Why would the president stop a housing bubble?

If you have to ask, you will never know. Just seems like a no brainer to me. We will go with what McCain says, this would help the fundamentals of the economy, which is the average working middle class american. When they are in trouble, everyone is in trouble. As indicated by the latest housing bubble, which brought down 5 major banks in the US and several major banks worldwide.

This doesn't make any sense.....Bush didn't start the wave of deregulation.

Correct. However your 'Maverick' (lolololololol wink wink nudge nudge)) McCain sure as hell voted for more deregulation, this was when the Savings and Loan scandal happened, and McCain was tied to the problem as well as 4 democrats.

[bush_cheney2004]

Keaton 5, McCain .. hearings .. blah blah.

Methinks you came in on tha ass end of a discussion with the wrong answer. The point was that previous banking and mortgage issues did exist prior to the Bush administration.

If you have to ask, you will never know. Just seems like a no brainer to me. We will go with what McCain says, this would help the fundamentals of the economy, which is the average working middle class american. When they are in trouble, everyone is in trouble. As indicated by the latest housing bubble, which brought down 5 major banks in the US and several major banks worldwide.

No, the world's financial system does not teeter on the desires of "average working middle class americans" who don't need NINJA loans to begin with. Everyone is not in trouble. Most of us are still paying our boring fixed rate mortgages without much fanfare.

Correct. However your 'Maverick' (lolololololol wink wink nudge nudge)) McCain sure as hell voted for more deregulation, this was when the Savings and Loan scandal happened, and McCain was tied to the problem as well as 4 democrats.

Let's see...that 4 to 1 in favor of Democrats again... thank you for supporting this thread's main point!

[GostHacked]

Methinks you came in on tha ass end of a discussion with the wrong answer. The point was that previous banking and mortgage issues did exist prior to the Bush administration.

And that is why I pointed out the Keaton 5 that was part of the Savings and Loan scandals you were talking about in the 80s. This was in reponse to your response to another poster, try to keep up.

No, the world's financial system does not teeter on the desires of "average working middle class americans" who don't need NINJA loans to begin with.

Money can be created out of virtually nothing anyways. Money is debt.

Everyone is not in trouble. Most of us are still paying our boring fixed rate mortgages without much fanfare.

Let's see...that 4 to 1 in favor of Democrats again... thank you for supporting this thread's main point!

True. However the only Rep among them wants to be Pres. Don't see the others on the radar at all. But both sides are to blame for the crisis.

[bush_cheney2004]

And that is why I pointed out the Keaton 5 that was part of the Savings and Loan scandals you were talking about in the 80s. This was in reponse to your response to another poster, try to keep up.

Who is Keaton? Perhaps you mean "Keating"?

Money can be created out of virtually nothing anyways. Money is debt.

No, this would violate the First Law of Thermodynamics.

True. However the only Rep among them wants to be Pres. Don't see the others on the radar at all. But both sides are to blame for the crisis.

Not even close...goverment cannot protect us from ourselves.

[GostHacked]

Who is Keaton? Perhaps you mean "Keating"?

Yes indeed.

No, this would violate the First Law of Thermodynamics.

Are you PolyNewbie incarnate?? Then how does a bank create money? Remember, money used to be backed by gold, which is no longer the case. Fiat currency, fractional reserve banking, ect ect .. cyclic. Money is debt.

Not even close...goverment cannot protect us from ourselves.

Because you cannot do that for yourself. Pretty sad.