Examine events of 2005 to see where the financial crisis came from

[darrelx]

There's a lot of finger-pointing and what-if scenarios floating around about how and why today's financial problems came about, but everyone agrees that it started with Fannie Mae and Freddie Mac imploding.

[Kudos to mauser for the link to this article

Comments

[lizetta]

I'd have to say that I think our current economy, let alone the economic problems, are so amazingly vast and complicated that any action or character could hardly logically be assigned to a single decision, or a single action/inaction.

[darrelx]

...and yet, without assigning any particular act or decision, several high-ranking democratic leaders still cry out that their party was not at fault.

Nancy Pelosi press release: 9/15/2008
"Eight years of weakened regulation of our nation's financial system -- including a failure to regulate risky, and often predatory, lending practices -- by the Bush Administration and Republicans in Congress have led us to this point, and could further erode our nation's economic health."

She was obviously lying purely for political reasons. Weakened regulation was the result of HER party objecting to S.190, not the Republicans who were trying to push it to a vote.

[badjahsensei]

...would these be the same Republicans and Bushies who had a total lock on all three houses from 2004 to 2006, and even flaunted the so-called "nuclear option" in the face of Democratic challenges?

Please, try and tell me that they were paralyzed again. :)

[darrelx]

Wasn't that the period of time with one Democratic filibuster after another preventing just about ANYTHING from being done in either the Senate or the House?

[badjahsensei]

I seem to recall the Nuclear Option being threatened when Bush tried to toss some quick Judicial appointments--ones whose credentials weren't being given the proper scrutiny. Surely, you've not forgotten Harriet Myers?

And likewise, I'm sure you've not forgotten the Republican filibusters of 1993, when they essentially shut the House and Senate down that summer? Did you object to them then? Would you have supported the Nuclear Option then? Be honest now... ;)

I'm sure you'll recall the filibuster attempts over bill H.R. 1585--the ones that the Democratic members could have shut down, but instead allowed to go on.

But you see, that's the difference in Democratic and Republican mindsets. Democratic legislators understand the rules and laws that enable the filibuster and don't try to block them or create weapons like the Nuclear Option to silence dissenters. Since the Bush regime took over, everything about the Republican agenda has been to silence those who don't take the party line.

[brianblackberry]

Three houses? Do you mean the three branches of government?

One of those three doesn't have political parties, one of those three are not like the others.

[lizetta]

Deregulation has long been a long been a mantra of the Republican party, with the ideas that a freer market was a better jumpstart to the economy. I don't completely disagree with that. But if an institution is so important to our economy that it needs to have an enormous bailout, then it's important enough to be regulated.

Fannie and Freddie may have been the first chronologically to fall, but I disagree with your opening statement that their fall was the initial step. It seems, to what I have been reading and hearing, that the central problem in the process has been the sub prime mortgage defaults, which by definition are not Freddie and Fannie loans.

This industry was allowed to build a house of cards, and everyone should have seen this coming. It's why I didn't buy a house a few years ago, and I don't have an MBA from Harvard.

[darrelx]

But if an institution is so important to our economy that it needs to have an enormous bailout, then it's important enough to be regulated.

Which is exactly why McCain co-authored S.190 to regulate Freddie & Fannie.

It seems, to what I have been reading and hearing, that the central problem in the process has been the sub prime mortgage defaults, which by definition are not Freddie and Fannie loans. I'll have to look up my sources but from what I remember reading about this over the last couple weeks, SubPrime mortgages were not *initially* under Freddie/Fannie, but later were rolled in to pad the numbers and increase the Bonus payments to the executives in charge (primarily Raines who is a self-proclaimed Obama advisor even though the campaign denies it now, and is currently facing fraud charges

[lizetta]

I think you have misunderstood my point. I am not trying to say "the political party that I most identify with is blameless, and the candidate I will be voting for is wonderful and handled this perfectly". I think there is plenty of blame to go around here. I am pointing out that I think you are using that philosophy, and it is without logic.

There are very few evil, bad, stupid, or completely wrong people in this world. Politicians may have their differences, but to lay all the blame for something this complicated on party affiliation seems like a gross oversimplification.

[darrelx]

Then I will simply state that I believe that S.190 would have prevented the problem we are in today, and that Democratic Party opposition to S.190 caused it to die in committee without a vote