"The Federal Reserve and the Bush administration believe the threat of defaults by A.I.G. on a lot of unregulated derivative contracts creates a national emergency. It’s too bad they didn’t think of that when they were opposing any efforts to regulate those markets. That would have been interfering with free enterprise. This move, somehow, is not...Can you imagine what conservatives would say if a liberal Democrat had moved to nationalize major financial companies?"
http://norris.blogs.nytimes.com/2008/09/16/socialism-21st-century-style/
4 comments:
Don't kid yourself. The recent rescues of big financial companies from collapse were rooted in the loose lending practices that started in the early 90's under the Clinton adminstration and continued under the Bush administration.
Hopefully, Obama administration is smart enough to keep Paulson on board for his bold moves.
Thanks for the comment...
How was Clinton responsible for loose lending practices?
Why would closer regulation not have reduced some of the excesses?
I like Paulson, I would love to see him as Obama's Sec Treasury
I also will acknowledge the Fannie/Freddie thing was a bi-partisan clusterfug.
But I have seen data that shows Fannie/Freddie as relatively minor player in the crazy lending.
It was hard to find this post again...you're writing a lot of stuff every day T!!
Lending practices changed in the 90's. I would never blame Clinton for starting this mess just like I wouldn't point the finger at Bush for this one. It would be like trying to blame the internet bubble on Clinton since he didn't force Greenspan to raise margin rates on "confederate dollars (IE AOL and the like)".
Here's the thing about regulation. It should've been in federal hands rather than state hands.
For instance, in North Carolina there has been very little problem with mortgages.
Why? My guess is because two huge banks dominate the state.
However, in California there were more federal regulators at Wells Fargo than the state had for ALL mortgage brokers in the state.
I hear you on the state stuff
My beef on this crisis is less with Bush specifically and more with the Republican ideology which has pressed deregulation and lower taxes with religious fervor.
I actually think regulation is the lesser issue in this crisis. I think US overconsumption/undersaving is the primary culprit and the costs are coming home to roost.
The low tax ideology without spending restraint overlaid by American consumer prolificacy has created a stewing pile.
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