Who is at fault for the current financial crisis?
Posted by Mike Sylvester - 9/25/08 @ 10:46 am - Filed Under National Politics
The New York Times, Daily Kos, and Congressional Democrats want you to believe that the current financial crisis is the fault of Republicans.
Rush Limbaugh, The Wall Street Journal, and Congressional Republicans want you to believe that the current financial crisis is the fault of Democrats.
Any rational person should realize that neither of the above statements are true. Both Democrats and Republicans are at fault for the current crisis!
Reasonable people can think that one Party is 60% at fault and the other Party is 40% at fault or something along those lines; however, no rational person can think this is the fault of one political party.
Is there ANYONE reading this blog who thinks this was 75% or more the fault on one political party and if so why do you feel this way?
Mike Sylvester
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11 Responses to “Who is at fault for the current financial crisis?”
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Mike
The roots of this crisis lie with the socialistic left …the great majority of whom are Democrats.
A little reading shows that politicians in the Clinton administration opened the floodgates to loans to unqualified borrowers through Fannie and Freddie. HUD further exasperated the situation with even more such programs.
The Bush administration tried at least eight times to impose oversight on the now giant quasi-government corporations but Democrats blocked all such efforts with party line votes.
here are some articles:
http://www.villagevoice.com/content/printVersion/541234
Andrew Cuomo and Fannie and Freddie
http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20080924
How A Clinton-Era Rule Rewrite Made Subprime Crisis Inevitable
http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=1
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
http://www.ibdeditorials.com/IBDArticles.aspx?id=306632135350949
Congress Lies Low To Avoid Bailout Blame
Gadfly,
You have done a good job of researching the portions of the problem that are the Democrats fault; however, you left all of the things out that the Republicans caused including:
The Glass Stegall Act which allowed entities like banks and insurance companies to invest in risky mortgage related assets.
In 2004 the SEC changed the rules and effectively doubled the amount of leverage that banks with at least 5 billion in capital could use. When this was done the Republicans were in control of Congress, the Presidency, and the SEC.
The above two items are the fault of Republicans and without the above two items we would not be in the situation we are in.
It took both Parties…
Mike Sylvester
[...] wrote in a previous post I believe that the Republicans and Democrats share the blame for this mess. I still think [...]
This IS the fault of Democrats in congress. Look up “Community Reinvestment Act”. This all started during Carter in 1977. In 1995 Clinton along with Democrats (it was led by Democrats at the time) expanded the program which ultimately put quotas on banks to provide low income citizens home mortgages. The vote went along party lines but republicans were able to get a mandatory reevaluation in 5 years. The reevalution came up during Bush’s administration. Bush looked at the expansion, warned congress and the American people that this exact crisis would hit. Bush put forth legislation to reign in both Freddie and Fannie and the Democrats killed the bill. LOOK IT UP! Please see Barney Franks quote on the matter in 2002-2003 (I can’t remember the exact date) In 2005 McCain reintroduced legislation to rein in Freddie and Fannie. Democrats again killed the bill. The Democrats that led the charge to kill the bill just happened to be the largest recipients of money from Fannie and Freddie. Again LOOK IT UP! This isn’t a matter of opinion. LOOK IT UP FOR YOURSELF!
Democrats that opposed regulation of Fannie and Freddie should in prison! Fire them all!
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print
http://wingod.newsvine.com/_news/2008/09/18/1882860-bush-attempt-to-rein-in-fannie-and-freddy-opposed-by-congressional-democrats-2003
Any Senator and/or Representative that is blaming Bush for this crisis is lying or just plain Ignorant. Please remember that it was regulation that actually caused it. They placed quotas on banks to provide these sub prime mortgages. It wasn’t CEO’s, golden parachutes, it isn’t Wall Street’s greed. It was the greed of Democrat law makers on the payroll of Fannie and Freddie. I say take the top ten recipients in Congress of Fannie and Freddie money and put them straight in prison.
I believe that the REP have controlled both houses of congress twelve of the last fourteen years. So, in 1995 the REP passed the quotas on sub-prime mortgages. If they objected to these “quotas” and wished to reign in Fannie Mae, why didn’t they do something. Bush and the Rep majority managed to pass many laws that were opposed by the Dem. But in this case they just didn’t have their heart in the fight. Perhaps, they were told by their Wall Street backers to shut up and sit down.
Ted,
I agree with your assessment. The Republicans sure could have and should have done something about this when they were in power!
Mike Sylvester
I have little time to comment, but I would like to add a quick blurb. At what point did the fault of the people get lost?! Do you not know what you make and what you can or cannot afford? I agree the government, both of the parties be it democrat or republican are to blame, but so are we. The American People have forgotten the difference between a want and a need. The American People as a whole have no idea what living within their means consist of. Of course we can all blame marketing tactics, but I recommend taking a harder look at ourselves.
Yes, the government is a MAJOR influence; however, the average American has a great deal of power as well. I recommend we all revamp our thinking regardless of the funds the government makes available.
What about the credit rating agencies? They are the ones who gave investment grade ratings to, and assisted in the creation of, these MBSs and CDOs that turned out to be toxic. Furthermore, their incentive structure is entirely inverted. They end up loosing business when they assign poor ratings, even when they are right in doing so! Had these derivatives been appropriately rated, that is their true risk was actually accounted for, we probably wouldn’t have seen the of fallout on wall street that we did. (this is not to say that credit rating agencies are the sole cause of the crisis; but most definitely a part!)
Steve,
I agree 100%