>> ^Drachen_Jager:

If they're going to deregulate then they should just scrub all the fraud laws. Hell why stop at economic relationships, why not de-regulate interpersonal relations too? Murder, rape, et al. Get big government out of my mass grave! Nosy bureaucrats, poking their noses into every little murder.
C'mon Libertarians, isn't that what you want? Don't Tea Partiers want the freedom to shoot illegal immigrants, suspected illegal immigrants (ie brown people) and (on a slow day) a few legal immigrants too?


There is so much fail in this post, I don't even know where to begin. First of all, the tea parties were started by libertarians but have since been hijacked by typical party-line neocons. Only a fraction of people there are libertarians.

Second, fraud is illegal and has been for a long time. Misrepresenting a product is fraud, which is exactly what Goldman did. You seem to think libertarians are anarchists who don't want contract laws to penalize fraud and other laws to penalize coercive behavior like murder. You are incorrect, sir.

Concerning regulations, the problem is quite simple:

If the government insures commercial bank deposits, the risk of losing one's deposit is offloaded onto holder's of dollars (mainly foreign central banks now) not involved in the transaction. With depositors having no skin in the game, banks wanting to make risky investments are more easily able to obtain deposits with which to speculate. To prevent that from happening, the banks have to be restricted on what they can do with deposits when they take FDIC.

Glass-Steagall was a 1933 Roosevelt bill that provided FDIC with restrictions. Clinton and most politicians from both parties were heavily lobbied by banks to keep the FDIC but remove the restrictions, and that's exactly what they did with the "Financial Services Modernization Act of 1999". No longer restricted from doing investment banking and unfearful of losing customers on deposit safety concerns, rampant speculation ensued.

Libertarians want FDIC eliminated because offloading risk onto other parties changes human behavior. Greed is normally offset by the fear of loss. When you eliminate the fear, all that's left is the greed and shit happens. We only support Glass-Steagall on the condition that we can't get rid of both FDIC and interest rate price fixing. Understanding now? Good, only 97% of the population left to go.

Wasn't my point that some regulation is necessary and deregulation (while generally beneficial) can be harmful

Wasn't debating you there. I was just laying out the mortgage crisis as I see it. Some regulation is good. Glass-Steagall was a good law that kept financial houses from being insular one-stop-shops. It is an example of proper government involvement in the market (one of the few). G/S was enacted because of the Great Depression. You think we'd have learned our lesson and not messed with it...

My point was to make sure everyone does not overlook WHY G/S was repealed. Many people put sole blame for it on banks & financial houses. That is wrong. Only some financial houses (AIG particularly) wanted to do this crap, but MOST did not. The key factor was that GOVERNMENT wanted the law repealed to change the financial rules and force banks to make more loans to people who it would formerly be ILLEGAL to give loans too. Government did this thinking that it was a good thing that would create more taxpayers & wealth. Well, for a while they were right. But as we know it was unsustainable in the long run. The blame does not like wholly on banks. They were just operating in the environment that government created. Good banks didn't undertake too much risk, but with competitors making money hand over fist in the late 90s through mid 2008 it was a tough sell.

>> ^Winstonfield_Pennypacker:
I think that is a foolish & myopic approach that ignores the most important player (government) and gives a free pass to #3 (consumers).
Wasn't my point that some regulation is necessary and deregulation (while generally beneficial) can be harmful? You stated yourself that repeal of the Glass-Steagall act triggered a slow fuse.


Subprime mortgages are one thing - and by their very nature would be acknowledged as poor risks and treated as such. The problem could not have escalated to its eventual outcome had it not been possible for banks to rebrand (and obfuscate) these things into more innocuous packages.

(Wow, we went from healthcare to the mortgage crisis in a hurry, didn't we?)

much regulation stifles innovation and growth, but there are behaviors and practices that are strictly parasitic or needlessly risky which should be reined in

The history of the housing meltdown is long and tortured - but it began in the 70s under Carter and culminated in the 90s under Clinton. When Clinton's admin repealed Glass-Steagall it lit a slow fuse on the economy which finally blew in 2008.

Congress (both Dem & Repub) wanted more people "in houses" because it got them votes. AIG and other financial houses lobbied for the changes because they saw they could make money by selling financial packages. I remember VERY well in the 90s the rancorous debates on this subject. People who opposed the repeal of Glass-Steagall were labelled by political opponents as 'evil rich fat cats' who 'oppressed the poor' and who wanted to 'deny the American dream to the working class...'

Do you remember that rhetoric? I sure do. They were able to argue very strongly that they were doing a GOOD thing and that opposing them made you a lousy, slimy, no-good dirtbag who hated the working poor.

So the law changed, and ALL BANKS (not just the lobbyists) were forced to deal with new market realities. If you didn't complete - you died. So they opened up financial options for 'the poor' they never would have DREAMED of messing with before. Now the poor could get loans. But in most cases the 'poor' SHOULDN'T have gotten loans because they couldn't afford them. But everyone was told, "Don't worry - Freddie Mac & Fannie Mae will get your back." So they did it anyway not because they were irresponsible or malicious. It was what they were TOLD to do because that's what government wanted, and as such it created a marketplace reality they couldn't avoid.

Moreover, it wasn't just the poor for whom financing got easier. The middle class could make a quick buck by flipping multiple properties. Speculation went wild. Housing prices skyrocketed. People got rich quick for virutally nothing. It was all going great until people overseas finally decided they couldn't keep make money on financial packages built on poisonous debt forever. POP!

I'm hesitant to lay the blame for this all on 'risky practices' of 'parasitic financial companies'. They played a big part - very true. But I've always said the housing problem was a THREE part problem. I list the problems here in order of culpability...

1. Government arranged the banquet and set the table.
2. Financial houses provided the food and sold the meals.
3. Stupid consumers gorged themselves on food they didn't need and couldn't afford.

Most people ONLY look at #2. I think that is a foolish & myopic approach that ignores the most important player (government) and gives a free pass to #3 (consumers).

^ "The 1999 repealing of the Glass-Steagall Act. Thanks to a Democratic Presidency."

The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (Republican of Texas) and in the House of Representatives by Jim Leach (R-Iowa) in 1999. The bills were passed by a Republican majority, basically following party lines by a 54–44 vote in the Senate[12] and by a bi-partisan 343–86 vote in the House of Representatives.[13] After passing both the Senate and House the bill was moved to a conference committee to work out the differences between the Senate and House versions. The final bill resolving the differences was passed in the Senate 90–8 (one not voting) and in the House: 362–57 (15 not voting). The legislation was signed into law by President Bill Clinton on November 12, 1999.[14]

(Wikipedia)

*****

Yes, Clinton should have vetoed it, but let's not forget who got the ball rolling.

Nice post. Good info.

Once you know, you can't go back.

Here is a list of things, in my opinion, that they do not teach in public schools:

Ben Franklin's Interpretation of why the Revolutionary War took place

The refusal of King George to allow the colonies to operate an honest money system, which freed the ordinary man from clutches of the money manipulators was probably the prime cause of the revolution.

To which some fools created the same monster bank, First Bank of the United States Thanks in part to one, Robert Morris a signer of The Declaration. Our nation's banking history is fraught with banking scams and controversy. Just take a gander at the Wikipedia pages above.

Even Woodrow Wilson would see the error of his ways in the end after singing the Glass Owen act into law. The FED is not a Government Agency if it were ththen our system of money would be Nationalized. We often here that word, "We can't nationalize the debt!" But we sure can socialize it!

A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the Nation, therefore, and all our activities are in the hands of a few men... We have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world—no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men."

The 1999 repealing of the Glass-Steagall Act. Thanks to a Democratic Presidency.

Throughout all of our history there is nothing but sleight of hand, cronyism, and corruption. I do my best to follow a strict code
of ethics why can't they? I know I'm not perfect and I often find myself but I always think "Am I doing the right thing?" If I can't answer yes to that question within moments then I know I'm not doing the right thing.

I leave you now with a few quotes:

Harry Truman once said there are 14 or 15 million Americans who have the resources to have representatives in Washington to protect their interests, and that the interests of the great mass of other people, the hundred and fifty or sixty million, is the responsibility of the President of the United States. And I propose to fulfill it. - JFK

From a good man no matter how suspect:



In my opinion the best speech ever given:



Full Disclosure even if it damns you. Someone said, "The Truth will set you free," or something like that. Sure it will but who's truth is it?

http://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act
The Gramm-Leach-Bliley Act (GLBA), also known as the Financial Services Modernization Act of 1999, (Pub.L. 106-102, 113 Stat. 1338, enacted November 12, 1999) is an act of the 106th United States Congress (1999-2001) which repealed part of the Glass-Steagall Act of 1933, opening up the market among banking companies, securities companies and insurance companies. The Glass-Steagall Act prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and/or an insurance company.

^Happened under Clinton. Democrats, Republicans, it doesn't really matter, they are all corrupted by lobbyists, campaign contributions or even bribes.

i agree wholeheartedly on your points on corruption in politics but i disagree that corporations should not be held accountable

Define what you mean by 'held accountable'. Held accountable for what, specifically? Folks keeps saying "hold companies accountable" but then in the same breath they freely acknowledge that the companies "did nothing illegal". I'm all for holding companies accountable when they break laws. But that's not what some of you are talking about. The tenor of the commentary here is to hold companies "accountable" for engaging in protected, legal free speech and commerce just because you find thier exercise of those rights unlikable. I find that sort of subjective application of 'accountability' more than a little creepy.

you are correct that much of what these lenders did was lawful.laws in which these institutions spent billions in either redressing or outright dismissing

I could go on for hours on this - but VERY briefly this was not started by banks. This was started by GOVERNMENT who was upset that more people were not being qualified for loans. It was a very convenient political target. Back then banks were 'evil' for DENYING loans! But a few financial institutions (such as AIG) saw a way they could make money by debt repackaging. Hmmmm...

The lobbyist arguments 'for' the change were not without merit. Proponents argued that loans would inject money into communities, increase wealth, reduce blight, increase education, generate tax revenue... The list of "pros" was not hard to conjure up. Politicians and lobbyists were convinced they were actually doing a GOOD thing.

Oh - and leave us not forget the tarring and feathering of anyone who dared OPPOSE the changes. Such people were called racists. 'Red liners'. They were 'evil bankers' who wanted to 'starve children', 'keep people uneducated', and 'stop the poor from having the American dream'. To pretend that this was some sneaky, sinister, secret scheme that NO-ONE knew about is bunk. This was aggressively marketed by politicians all through the 70s and 80s.

When Glass-Steagal was repealed, everyone was forced to deal with the law AS IT EXISTED. Who should be punished for it all blowing up? The Banks who were operating within the legal framework that was dumped on them? Or the politicians who changed the law and made this whole crap-fest possible? My opinion is that politicians must be the FIRST to be held responsible, not the last.

I'm not saying companies should walk away clean. What I am saying is that you should only hold them responsible for violations of the law - not for exercising their free speech. It is the politicians you have to hold responsible when the law is bad. Put the blame where it belongs.

that being said,understand that what i say here is in no way an attempt not to change your viewpoint but rather to give historical context.

I am not one who is threatened by hearing other points of view. Have no fears concerning my mental status. I recommend that you yourself also do not have any need to feel threatened when I point out that some of what you call 'historical context' is - in fact - personal opinion and interpretation.

a governments role concerning business should be fraud protection

No argument. That's government's only real role in this matter.

when a corporation can buy legislators to enact laws that benefit their own bottom line in the form of lobbyists we move closer to a plutocracy rather than a people run government.

I will argue again that the real issue here is not 'corporations buying legislators'. The problem is corrupt legislators. Companies can't 'buy' what isn't 'for sale'. Again - your argument when you strip away the rhetoric is not against companies. Your argument is one that calls for greater limits on government.

you state that you are immune to such manipulations and indoctrinations

Specifically, I have claimed that no company controls my life. And they don't.

if this is true then why do you constantly use terms like "lib" or "leftie

To accurately (though informally) describe persons of a specific political philosophy.

it was only 20% "stupid borrowing" while 80% fraudulent,predatory and deceitful lending practices.

Please supply your sourcing for this claim. If 80% of lending was 'fraudulent' as you claim, there would be massive prosecutions going on. There are no such prosecutions, because the lending agencies were (in fact) operating within the law. In harsh reality, many of the so-called 'predatory' lending tactics were encouraged by the federal government for the express purpose of increasing the number of people with homes (see repeal of Glass-Steagal).

when the government and our representatives are in bed with the very same companies that can create/destroy on such a huge scale we should all sit up and take notice

Yes - by changing the political system so that politicians are held accountable for their actions. By not allowing politicians to pass laws without full disclosure, 75% full congressional majority votes, and tons of other restrictions that would prevent them from being able to influence the system. The problem is not companies. The problem is politicians who are never held accountable.

All political offices should have a single term limit, and then the candidate is banned for life from all political activity except voting in congresional & presidential elections. Politicians should not be elected. They shoudl be randomly drawn up for service akin to jury duty. All laws should require a 75% majority vote of the entire congress before passing. Only one law should be allowed per bill - no 'omnibus' bills. If some 'bad event' happens that is tied to the passage of a specific law, then all the politicians who voted for that law should be the ones held responsible. And on and on...

I've literally got a BILLION great ideas along these lines of "How to stop corporations from influencing the political system by imposing limits on politicians."

Then when they bite, you exploit them with all of the things written in the fine print in that contract they signed.

People keep acting like bank credit with interest is some 'secret'. Everyone knows that credit cards have high interest rates and fees. When a bank hits you with fees then you pay off the balance and cancel the account. Or (better) never run a balance and you'll never have a fee. Or (best) never borrow money from a bank. It isn't complicated.

Also, some are acting as if banks should behave like altruists. It's as if you are pretending the world is Bedford Falls, that banks are the Building & Loan, and bankers are George Bailey. No no no... Customers must walk into the bank with the mindset that they are dealing with Mr. Potter. Banks sell a useful, but dangerous product. If you are smart and careful you can come out well. If you are stupid and careless you will lose every time. Pretending that banks should act like friendly charities is foolish.

I don't know why the government hasn't made strict guidelines as to how a bank must conduct itself.

They did. The government was the entity that opened the 'free money' floodgates by repealing Glass-Steagal because they wanted more people buying homes & cars. Banks were cool with it because it allowed them to be one-stop-shops, repackage debt into paper commodities, and government promised Freddie Mac & Fannie Mae would cover it all. Government set the table & provided the food. Banks sold the tickets to the banquet. Customers gorged until they ruptured internally. Three parties were involved, and the blame is shared by all three equally.

I'm just saying the government needs to protect those less savvy about credit and debt and keep the banks from exploiting these poor fools.

I'm all for the concept, but how do you implement it? Force everyone to take a class or sit down with a lawyer before they can get a loan? I don't think that will help except maybe 1 case in a million. Almost no-one goed to banks with the delusion that they don't have to make payments or incur interest.

I volunteer time as a sort of career/money counseller to help people out of financial trouble. I've sat down and explained the whole 'never borrow money because of interest...' formula very patiently and clearly. It doesn't matter. People hear the speech, and turn right around and get in debt to the gills buying crap they didn't need. They don't want to sell the stuff and pay the bill either. They want someone to pay the bill or absolve the debt so they can keep their stuff. That's just the way human beings are. So forcing banks to sit people down and go through a "here is how debt & interest work" education is helpful, but will not make the problem go away.

The only sure fire way to 'protect these fools' (as you put it) is to have the banks use a means-testing system by which they deny credit to 'risky borrowers'. "Sorry - we're not lending you money for your own safety." That's a recipie just asking for a lather-rinse-repeat of the whole 'red lining' accusation in the 90s. Can't win for losing. Banks are 'evil' if they expect to be paid back.... Banks are 'evil' if they refuse to lend money to people who can't afford it... Nice catch 22.

dag, I don't think they're a telethon, but the Bill and Melinda Gates foundation donates US$1.5bn a year.. I'm pretty sure they might have built a road or two..


you are joking. They did deregulate major laws which had been in place for years - google Glass Steagall act, for one.
In this country you had a financial services authority who turned a blind eye to the cdo's that were being traded, and/or didn't even know what these new banking derivatives were, not even the bank of England had a clue.

Removing Glass Steagall would have done nothing if the government had not set interest rates so low. Oh, and don't forget the government's implied guarantee of mortgages in Freddy and Fanny Mac.

It always intrigues me to see people claim that humans need government to provide services for them. I personally don't think either socialism or capitalism are perfect, but in the latter, at least you are free to choose what you want.

>> ^Enzoblue:

Talk about black and white. They didn't deregulate everything, not even close. They selectively removed very specific barriers to a very select number of companies so that they could rape at will. All laws that prevented or hindered anyone hurt by these changes to fight back, (plus many new ones), were kept very much in place. The deregulated the fat cats and over-regulated the rest.
Another example of what I'm getting at:
Why do I have to have that bulky stupid baby car seat? Why can't car companies make a built in the middle of the back? Because the select few companies that make a fortune off the overpriced buggers have paid government officials a lot of money. Those officials make sure that any advances in baby seats never make it out of government inspection. Now we have the same design we got in the 80's.
This is what I'm talking about.
P.s.
I am a closet anarchist.


you are joking. They did deregulate major laws which had been in place for years - google Glass Steagall act, for one.
In this country you had a financial services authority who turned a blind eye to the cdo's that were being traded, and/or didn't even know what these new banking derivatives were, not even the bank of England had a clue.
Because there was no control, bankers would simply sell these loans on, making their huge sums of money+bonuses, and not caring for the consequences.

And how many times have we seen this process in history? Speculation causing bubbles, which then burst.

I don't understand your car company example..... car manufacturers give the option for an ISOFIX standard implementation in the back seat so parents can put any kind of seat they want in the back. They could sell the seat as an option as well...but why bother when there's already a huge market out there for babyseats.

What.
But yeh, your point is basically corruption. Well, you think the government stops progress, what about corporations? Surely the corporations are as much to blame for paying off government officials as the government is for accepting them? it takes two to tango.

And why can they pay? Because they are ridiculously rich in the first place. All thanks to the lovely free market. As I said in my previous post, im not saying free market is bad. You just need a good mix of both, erring on the side of Control that benefits the nation, not wealthy individuals. Also I did acknowledge corrupt politicians in my previous post - what are you gona do about it? We're living in democracies aren't we? Just vote these politicians out right???

Democracy my ass. But. thats a whole different matter.

I think it's funny that if it was under Bush's presidency, rougy's comment would turn into something to the degree of "only a dumbass Repub would think of doing something like this." Since he can't criticize his own party because he's a sheepdog, he can only muster a forced insult along the lines of: "well, those Repub... bystanders want... torture! I tell you!" Honestly, why are you so hopelessly stuck on this left vs right nonsense? They're practically the same BS, yet you worship Democrats after Vietnam, the Clinton stock market bubble, Clinton's repeal of Glass-Steagall, the condoning of the same Fed policies and government expansions?

>> ^deathcow:
How about answering the fucking question...


He did, which vid were you watching?

Gibbs could very well have countered that using a crisis to expand the Executive Branch's authority is EXACTLY what the Bush administration did after 9/11. The question was loaded to get him to say as much. I shouldn't even have to really point it out either, since it was such a blatant power grab back then, and really cannot be compared to what is happening to the economy - this is more of a cause and effect. Things that happened in the past have created the situation. We can't change the past, but we can try to make it so this doesn't happen again. The problem is, WE ALREADY DID, but threw it away when we gutted the Glass-Steagall act.

You'll also notice in the wake of all the Republicans repudiating what Cheney has said, not one has apologized like he's Rush fucking Limbaugh.

>> ^StukaFox:
"He came in with a recession" -- WHAT?!?!?!


Clinton's entire term was a dot-com stock market bubble whose inevitable and proportionate bust began to occur in 2000 when Bush took office. Greenspan was very loose with money as Fed chairman under both Clinton and Bush, and Bernanke is even worse. Not wanting the painful withdrawal to happen under his watch, Bush did what was politically expedient and shot up the veins with record deficit spending and artificially low lending rates. Greenspan price fixed interest rates down to a record low 1% rate in the middle of a recession and held them there for a year. That transformed the speculative misallocations from stocks to real estate, got consumers borrowing and spending instead of saving to produce, and the day of reckoning was effectively postponed and enlarged until Obama's term. Obama is essentially choosing the same reinflationary path, and it's really only a matter of time before our creditors become net sellers of our bonds and turn the game into a hyperinflationary nightmare.

It also helped that Clinton repealed Glass-Steagall, which allowed much higher leverage and the securitization of mortgages. Ideally, we'd just get rid of the spiker and stop trying to regulate the drunken behavior, but Republicrats don't seem to think in those terms, they're quite party-whipped. I talk to Democrats who think Clinton decreased the national debt, social security is a success, Vietnam was a Republican war, banks don't create money, the dollar is still backed by gold, trade deficits are good. It's quite sad, just two socialist parties who spend all day trying to figure out who's more to blame while libertarians sit back and watch the country go to hell.