What Caused Our Economic Crisis
September 27th, 2008 by Dan GaffneyHave your finger on the pause button, while you watch one of the best explanations of how we got into this “economic crisis”.
This video rocks! (it could also strongly influence how you vote in November!)
September 27th, 2008 at 1:26 pm
This is pure, unadulterated, right wing propaganda, put out at a time when we are in dire need of a solution. For shame!!!
Anyone who goes through this carefully, and I did, can see it as no more than a partisan blame game attempt to cherry pick what the Dems did or did not do, when an honest evaluation would put the blame on both parties, but more on the GOP.
Don’t forget, the GOP held total power, all three branches, when this sub-prime problem and the housing bubble was becoming an obvious problem.
I say obvious, because even a novice like myself was calling attention to it on the older version of this very forum, as early as 2002 - 2003. I was worried when the Fed kept driving interest rates lower at a time when consumer debt (credit cards and mortgages) was increasing rapidly, along with the Federal deficit.
I had long discussions over this on the forum with “Rick”, “Weekend at Bernies” and others, pointing out how TV economist Kudrow was cherry picking and shilling for the Bush administration.
The main point is this: Bush and the GOP Congress could have acted to rein in Fannie and Fredie, and enact oversight on the investment banks. They did not. Neither did the Dems!
The CRA legislation in the late ’70’s, amended by Clinton and the GOP in the mid-’90’s, certainly greased the skids for the excesses that followed, but with good intentions, to expand the housing market to lower income folks. Lack of oversight by Bush and the GOP permitted these practices to continue. There were no Dems stepping up to the problem either, in fact, their opposition was unforgivable.
Getting back to the propaganda, please note the absence of blame placed on the excesses on Wall Street. These people must be held responsible and accountable, because they allowed greed to overwhelm any sense of propriety. Is there anyone today doubting their culpability?
As far as politicians receiving contributions from the likes of Fannie, Freddie, and the Wall Street investment bankers, why single Obama out? Most of them did! That’s one indication that we have propaganda going on here, certainly not truth seekers.
Dan, you ought to be ashamed putting this up as some kind of truth. You demean yourself and your party by behaving like this in the middle of perhaps the worst domestic crisis since the Great Depression.
We need solutions now, not propaganda and blame gaming.
You know how serious this is when we have Secretary of the Treasury Paulson getting down on his knees begging Congress to take quick action.
September 28th, 2008 at 9:47 am
What about the 20 % of ‘profits’ of the bailout going to ACORN? What is ACORN- are they the people behind democratic voter fraud?
September 28th, 2008 at 9:56 am
I don’t care who cause this. It’s here and we must deal with it accordingly. It’s like the Iraq war. I don’t care if it’s right or wrong that we went in there. We are there and lets deal with it and get out. Back on topic, both Republicans and Democrats made money off of this for years. Now they are in risk of losing all their precious invested dollars and fundraising. Who is going to be paying for the bailout plan when it’s all said and done? The government tells you that the companies will repay the taxpayers money back and if not more. But how will the lenders make any money? Off you, the taxpayers. The taxpayers will dish out the $700 billion. The lender will owe lets say $710 billion back to the Government to repay this huge loan. The lender needs to make money. So, the lender passes on this cost of the extra $10 billion and maybe another $10 billion to the taxpayers who want to take out loans. Therefore, loans are going to be high interest, maybe stupid fees like high processing fees, and still be a burden on the taxpayers and our economy. Who walks away in a good situation? Wall Street and the Government. In turn, later on in the future when our younger generations take control of the country, probably the 18-24 year old generation, this will come back to haunt them and this is when the bubble will burst. We are just inflating this bubble. It has to burst some time, why prolong it?
What can help without a bailout? That’s a hard question to answer. The market is led by speculation and media influence. If the media goes out and says the stock market could drop by 1/3 then people get scared and believe it, so they take their money out. The Government must reassure the investors that this is not true. Maybe, offer loans or refinancing to taxpayers that are hurting to repay their mortgages. Offer better FHA programs. Offer consolidation loans to students to combine their private loans with their federal loans. If we look at this crisis, most bad mortgages are newly wed couples or fresh out of college students. They had maybe a 40-50% debt to income ratio straight out of college and they still got a mortgage on top of that. What they didn’t know is that their college loans and mortgages were adjustable rate and it bit them hard. They must stimulate interest to borrow once again. Offer incentives to banks if they start lending again.
So in my opinion, let the market go. It will close the gap of the rich and middle class. It will help inflation and it will help the value of the dollar. Maybe, offer the loans and incentives I said before, which I believe will help the bad mortgages, and it will also help new graduates the ability to afford to buy a home out of college. This in turn, will help the housing market recoup and offer confidence to the market. I see a recession to come out of this idea but not a depression. Wall street doesn’t win and the bubble isn’t prolonged. It’s taken care of right now. Capitalism will prevail. People like Buffet will sink their money into these hurting companies like he has done already.
October 2nd, 2008 at 10:44 am
I was told by a friend that Dan went into a rage at me the other day regarding my post on this thread.
Unfortunately, I did not hear it, so I looked for the podcast — there is none in the podcast section. What is the podcast section for, if not for current podcasts? (Jared, this is not meant to be a criticism of you.)
Nevertheless, I note also that Dan did not bother to respond on this forum, instead he goes on the air. What is the use of having the forum if the debate venue is moved from the forum to the air. In other words, I am not able to respond to Dan’s points.
October 3rd, 2008 at 8:32 am
Read analysis in Business Week of how this happened. The people who do real analysis (contrasted with talk radio GOP propaganda) in the business world have almost all shown that this was a lack of oversight by the people legally, constitutionally and morally responsible for such oversight. These duties clearly fall on on the executive branch…HELLO
And the GOP controled all 3 branches of government while rome burned. You talk radio freaks living in your own deluded reality need to do a reality check. Typical..