5 comments

1. Jason C says:

   February 18, 2009 at 9:16 AM

   Awesome video. People don’t realize the history and time line of events to the housing bubble burst.

   FYI, here’s another great video to watch on the “stimulus” bill:
2. Josh says:

   February 18, 2009 at 12:43 PM

   I have no doubt at all that the unfailing support by Democrats of Fannie and Freddie was part of the problem we face today, but to ignore the massive deregulation that has been a part of the doctrine of Conservatives and Libertarians alike is ignorant at best and more likely dishonest. This problem was a perfect storm of a failed mortgage system (fueled by F&F) combined with the Reagan/Chicago school that believes regulation is always a detriment to an economy. If F&F alone were the problem, the mortgage industry would have been the only industry maimed. You can thank massive deregulation for the fact that our retirements are less than half of their previous worth.
3. Tyson Wynn says:

   February 19, 2009 at 5:27 AM

   Josh,

   Would you please provide some examples of just what deregulation was implemented and how it made for the current mess? I’m sure my readers would love to understand the issue better.
4. Josh says:

   February 19, 2009 at 12:09 PM

   Well, where to start…
   In many industries, deregulation began in the Carter Administration, but the banking industry has changed dramatically since 1980. The Depository Institutions Deregulation and Monetary Control Act led to the regulation of interest rates which gave us the conditions for predatory loaning. I don’t know how much of the mortgage problem can be traced to this, but loans being handed out with crazy variable interest rates have been well documented. This law also lowered asset requirements for S&L’s, upping the risk they could take. The Garn-St. Germain Depository Institutions Act was intended to save a rough S&L industry, but led to wild practices by leaders in the industry looking for quick, large amounts of money. These are just a couple of examples of the across the board deregulation that began under Reagan and continued all the way through GWB (including the Clinton years with a republican Congress). In fact, one of the most important laws was during the Clinton’s last year. The Graham-Bleach-Bliley Act allowed for a massive consolidation of financial institutions. Like I said in my above statement, this isn’t one party’s problem as your video implies. This problem is one that must be shared by both sides of the aisle. Quite frankly, I hope your posting of the video is a political statement and not a reflection of your view of the crisis. Hopefully we can all look at the issue as a whole and come up with some real solutions. The story is basically accurate, but blatantly ignores why the whole financial market was so affected by the mortgage issues. We have had major financial problems twice in the last 20 years when we could have corrected many of the problems from the first and avoided this latest one.
5. Tyson Wynn says:

   February 19, 2009 at 3:04 PM

   Josh,

   You cite The Depository Institutions Deregulation and Monetary Control Act (was this regulation or deregulation?). Then you say you “don’t know” how much of the mortgage crisis can be traced to it. Then you cite an act related to the S&L problems of the ’80s, which allowed for the variable interest rates. Wow, letting lenders set the terms whereby they risked loaning their money. There’s a novel concept in a free society. Were you there when they held the gun to people’s heads and made them sign agreements they couldn’t afford? Do the borrowers bear any responsibility in your view? Or is freedom in general the problem?

   As for The Graham-Bleach-Bliley Act, there are many economists who argue, quite successfully I think, that The Graham-Bleach-Bliley Act actually allowed the larger banks to be better able to tolerate the problems in the market.

   As for the video, whatever your hope, it is what it is. You bemoan “deregulation” in the private sector. The video clearly shows, from the horses’ mouths as it were, persons (typically Republicans but also Alan Greenspan, who is certainly no partisan) seeking to REGULATE Freddie and Fannie repeatedly during the Bush Administration. They were rebuffed repeatedly, especially by Barney Frank. It amazes me that people can so prophetically, as it turns out, warn of danger dead ahead and seek reform, only to have the catastrophe arrive, then have hindsighters pile on them for their role in the “deregulation” that led to the mess.

   Deregulation is a convenient bogeyman in the current economic situation, but when looked at critically, there’s not much there, especially when you consider the lack of regulation on Fannie and Freddie (that was repeatedly asked for by Republicans). I have no problem criticizing my own party, but I’m not going to do it without cause. There may have been other Republicans guilty of not acting, but the ones in this video were right.

   Oh, and Barney Frank was wrong. But that’s nothing new.

Sorry, comments are closed.

Copyright © 2012 | The WynnBlog is proudly powered by WordPress.org -