The slow motion collapse that is decimating Wall Street is not a random event that just happened to occur in 2008. It is the direct result of the Bush administration’s mis-management of the economy, and their willful negligence in sweeping away regulations that might have prevented this disaster.
It started with the Bush tax cuts that overwhelmingly favored the rich. This was followed by Alan Greenspan’s Fed dropping interest rates to absurdly low levels to try to energize a moribund economy. This in turn led to the real estate bubble, which was facilitated by lax regulations that allowed lenders to give mortgages to anyone who walked in the door - regardless of whether they had the ability to pay the money back. Closing the loop was Wall Street bankers waving a magic wand over junk mortgages and turning them into triple A bonds.
A small number of bankers, brokers, traders and executives made vast sums of money while the game was hot – multi-million dollar paydays that West Michigan workers can only dream of. Now that the bubble has collapsed, U.S. taxpayers are expected to pick up the tab. Heads they win, tails we lose.
This is what happens when a Government organizes itself around the philosophy that businesses should be allowed to regulate themselves, and that unrestrained free market capitalism is the only path to prosperity.
American taxpayers have been taken for a ride, and the same people who brought you this have the nerve to ask for four more years.
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2 comments:
Were the "lax regulations" that gave mortgages to everyone promulgated by the federal government or by the lending institutions?
The mortgage brokers responsible for many of the loans are not regulated at all as far as I know. The people who bought the bad loans (Fanny Mae, Freddie Mac, Investment Banks) were more or less regulated but the mortgage products were not.
The rating agencies who valued junk paper as AAA are completely unregulated. So I guess the answer is that everyone was responsible.
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