Quote:
Originally Posted by cykoe6
This crisis has nothing to do with deregulation and everything to do with Chris Dodd and Barney Frank forcing lenders to make bad loans or face lawsuits for racial discrimination and then allowing Freddie and Fanny to buy the bad loans at the same time fighting any efforts to place lending limits on Fannie or Freddie.
I challenge you to explain what deregulation has to do with any of this.
Even if you were right what does that have to do with Obama's insane deficit spending spree? Mistakes made in the past do not justify bad polices toady.
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The forced loans were not the major problem. The major problem were banks like Washington Mutual (and to some degree Fannie and Freddy) giving loans to people they knew couldn't pay them (and the people who took them knowing they couldn't pay are equally responsible at this level) then packaging them up and selling them. The seller then resells them and that buy splits them up and sells them again and those buyers use these mortgages as a base for an investment portfolio. So there is tons of money generated from selling what will ultimately end up being a bad loan. The one that gets screwed is the last company caught holding the hot potato. Everyone downstream got their commission and made their money so they don't care. There were entire fortunes made based on these loans (as well as credit default swaps and the insuring of those swaps that went along with them) so when the loans went bad it brought it down like a house of cards.
Nobody held a gun to these banks heads and forced them to give out these loans, they did it simply for profit and they helped to set off a chain reaction.
There is plenty of blame to go around.
- blame the banks that willingly gave out these loans (not forced loans under that law, but subprime loans they did not have to give and gave anyway)
- blame the people who took the loans knowing they could not pay them back. Or who were not smart enough to ask how much their payments may go up when the fixed 5 year rate expires.
- blame people who watched 2 episodes of Flip That House and thought with a subprime loan they could be the next Trump only to get in at the wrong time and get stuck with a couple of houses they can't sell and can't pay for.
- blame greenspan for pushing banks and suggesting to everyone that they use a VAR loan because of the low interest rates.
- blame the republicans for their non-stop pursuit of deregulation.
- blame the democrats for not fighting the deregulation, for not working hard to put in some kind of oversight and for starting the ball rolling with their laws that created the forced subprime loans (while many of these loans are not the problem, they showed the way to the greedy and helped them gear up and sell them in mass)
- blame wall street for buying and selling loans they knew were bad in an effort to make a quick buck and not be the one caught with the loans when they went bad.
I'm sure there are many others to blame including banks and companies that begged for bailout money and spent it on stupid shit as well as banks who are unwilling to work with home owners to help them stay in the house with a refinance deal. instead they foreclose and bring the value of that house and all around it down.
Obama is basically trying the New Deal style of stimulus. He is hoping that his plan can create a decent amount of jobs to put people to work and that these jobs will last 1-3 years (depending on what the job is). By the time the job comes to end hopefully the economy will have rebounded and there will be more private sector jobs being created and these people can transition from the stimulus job into a private sector job. That said there is no excuse for some of the worthless pork crap spending that is in the bill.