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Meet the Real Villain of the Financial Crisis

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futurebeachbum

futurebeachbum

Beach Fanatic
OpEd in the NYT maintains, correctly I think, that Congress is to blame.

From the article:

More important, it was Congress that sat by idly as consumer advocates warned that people were getting loans they?d never be able to pay back. It was Congress that refused to regulate derivatives, despite ample evidence dating back to 1994 of the dangers they posed. It was Congress that repealed the Glass-Steagall Act, which separated investment and commercial banking, yet failed to update the fraying regulatory system.

It was Congress that spread the politically convenient gospel of home ownership, despite data and testimony showing that much of what was going on had little to do with putting people in homes. And it?s Congress that has been either unwilling or unable to put in place rules that have a shot at making things better. The financial crisis began almost three years ago and it?s still not clear if we?ll have meaningful new legislation. In fact, Senate Republicans on Monday voted to block floor debate on the latest attempt at a reform bill.
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I don't expect Congress to level much (if any) criticism at themselves. They are, as always, blameless.
 
futurebeachbum said:
OpEd in the NYT maintains, correctly I think, that Congress is to blame.

From the article:

​

I don't expect Congress to level much (if any) criticism at themselves. They are, as always, blameless.
Click to expand...

"Come to think about it, shouldn?t Congress have its turn on the hot seat as well? Seeing Goldman executives get their comeuppance may make us all feel better in the short term. But today?s spectacle shouldn?t provide our government with a convenient way to deflect the blame it so richly deserves."
 
FBB, do not expect to convince many that the blame lies with Congress, Freddie Mac and Fannie Mae. Congressional representatives that had a hand in assuring that many people granted homes they couldn't afford, loaned money they couldn't pay back and believed everyone is entitled to instant gratification of the American dream regardless of what their personal situation might be, are really not to be held responsible for their valued judgement, no matter how faulty it might be. Barney Frank immediately comes to mind.
 
I gotta go with Taibbi on this one. If every single mortgage loan which was underwritten as a CRA loan between 2002 and 2007 went south on the same day, we wouldn't be where we are.

CRA loans are a very small percentage of what went (and is going) south (especially if you are looking at $$, not counts). If, on the other hand, lenders had stuck to 1980's era underwriting guidelines on non-owner occupied (investulator) loans, our foreclosure rate in SoWal wouldn't be approaching 20% of all properties and you wouldn't have subdivisions full of brand new, never lived in foreclosures in Phoenix and Las Vegas.
 
Yep, that's why the GOP wants to just do nothing, since it's hard to actually blame anybody. I mean, who knew? Too many causes. Let's not point fingers. Let's get the financial industry back to making 4-5 times the profits of the rest of the industries, where God meant for them to be.

Sorry, I'm a little bitter over the financial reform bill (or, as Linda Richman would say, "which is neither reform nor a bill - discuss."). It doesn't go far enough, and the GOP is still filibustering it, proving either that they don't care what the proposal is, if Obama wants it they're against it, or that they are complete lapdogs for Goldman and their ilk.

Taibbi actually has a really interesting point in this article, which is the belief that the people running these behemoth banks are just that much smarter than the rest of us and therefore deserve all of the money.

Don't believe it for a minute. I believe that if you are a reasonably intelligent person, and you follow the financial news closely, you will find that they are just not that smart. Period. They are, however, deeply entrenched in a belief system that makes Scientology seem like a book club, and unlike Scientology, we are paying their club fees.
 
Buz Livingston said:
Sure Congress bears part of the blame-note the guys filibustering the bill.
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Can you tell me if you think that this is a good bill and if so why?? From what I've been reading it seems that even though the Republicans are blocking this bill, many democrats also say that it lacks teeth. Here is one such opinion piece that I found interesting Financial Reform: Meat or Kabuki Today? | FDL Action

I appreciate your input Buz :wave:
 
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