LAST WEEK OUR government went to work to dig our country out of what has been characterized as the worst financial crisis in America.
So what went wrong?
Deregulation in the financial industry led to mortgage lenders lending money to people to buy houses they could not afford. While conservative banks would require prospective homeowners to still put 20 percent down to buy a house, there were plenty of others that would lend money to people with little or no money down. As people defaulted on home loans, the crumbling financial crisis started.
What we wonder about is why we have not learned from our past?
In the 1980s, there was deregulation in the financial industry and that deregulation brought on the savings and loan crisis.
That crisis caused the failure of 747 savings and loans and sparked an economic recession in the 1990s.
It is hard to understand why our current president would have allowed deregulation, especially when his family was affected by the savings and loan deregulation problems of the ’80s.
During the savings and loan crisis, George H.W. Bush was vice president and his son Neil Bush was on the board of directors of Silverado Savings and Loan in Denver. This savings and loan was run by former Emporian Mike Wise.
The bank made bad investments and it collapsed in 1988, costing taxpayers $1.3 billion. It was determined that Neil Bush had engaged in numerous “breaches of his fiduciary duties involving multiple conflicts of interest.”
The savings and loan bailout cost $160.1 billion, and $124.6 billion was directly paid for by the U.S. government. This current bailout could cost taxpayers $700 billion.
These bailouts are expensive and cost taxpayers dearly. How many more crises will have to happen before we learn that deregulation among financial institutions may not be in our country’s best interest?
One would have hoped that our president could have steered us clear of this impending disaster. Unfortunately, it is just another example of poor leadership by our country’s top CEO.
Christopher White Walker
Editor & Publisher
create (anonymous) says...
More spin, spin, spin. What came first, the housing foreclosure crisis or the credit risky people who signed the sub-prime mortgage agreements to begin with? How many real-estate brokers actually warned clients about ARM's, or were they too busy laughing all the way to the bank?
This crisis came partly because so many householders began chanting the American mantra -- charge it, charge it. Their appetites ballooned while their pocketbooks slowly deflated. Runaway spending!
Don't forget, John McCain was also all for the original Paulson bailout deal, the one that was also bailing out foreign banks. Neither candidate is without sin, and we all need to realize that.
October 1, 2008 at 5:53 p.m. ( permalink | suggest removal )
open_eyes (anonymous) says...
That's sure funny, pretty much every financial and economic expert point to the regulations that FORCED banks to make loans to uncreditworthy people as a big part of this crisis. And, as I posted over on the other thread, Bush tried to put in more regulation in 2003, Bush & McCain both in 2005, and Bush again earlier this year. So, "our country's top CEO" TRIED to steer us clear of this impending disaster, but was shot down by........ Congress......
But I still blame Bush for not pushing it hard enough. He should have been much more insistent. But then again, all the Democrats poo-poohing him couldn't be wrong, could they? After all, there was nothing wrong with Freddie & Fannie in 2003. If you want proof, watch all the YouTube videos of the Democrats that shot Bush's plan down (like Barney Frank) arguing that Freddie & Fannie were in fine shape....
Also, check out the 1999 NY Times article where the guy at the thinktank predicted this was coming because of Clinton's aforementioned policies....... looks like he was right, wasn't he?
http://query.nytimes.com/gst/fullpage...
October 1, 2008 at 8:27 p.m. ( permalink | suggest removal )
tbluma (anonymous) says...
Chris I don't know why Mr.Kelly made such a big deal about your paper being Repubican. No mater how you call it, a LIBERAL is a LIBERAL. The gazette is LEFT WING LIBERAL. All I have to read is the editorial page under under commentary every day to figure that out. But alas to my point. President Bush, Sen. McCain and many other Conservative (Democrat or Republican) warned the congress of this starting in 2004 or sooner! So put the blame where your Gazette policies would have us vote. Of course I've never known a LIBERAL that was wrong so I sure won't hold my breath, as long as I've no other paper in this town to read but yours. Tim Bluma
October 1, 2008 at 10:18 p.m. ( permalink | suggest removal )
goodoleboy (anonymous) says...
So "trying" to steer us clear absolves and vindicates them? Come on, if Bush was so concerned about this he should have made it a top priority rather than blowing smoke at us about Iraq. Bottom line is that it happened on his watch, too much has happened on his watch, and I think republicans and democrats agree on this.
October 2, 2008 at 6:38 a.m. ( permalink | suggest removal )
create (anonymous) says...
If Bush had so much control, why did he allow his buddy Paulson to provide hundreds of billions of dollars of bailouts for FOREIGN investors. Didn't Bush read the proposal? Or did he just trust his best bud?
Bush was all for the original proposal that allowed a lame duck Treasury Secretary full control with no oversight. Thank goodness that has changed now, but Bush allowed it to begin with. And you want to blame Clinton?
I'm with goodoleboy. Why didn't Bush stop the train with stronger muscles instead of just allowing this to go underground to simmer away while he sold the war in Iraq with his own spin, spin, spin.
Republicans called for deregulation during the Bush administration and Bush signed on the dotted line.
October 2, 2008 at 7:41 a.m. ( permalink | suggest removal )
open_eyes (anonymous) says...
goodoleboy, I agree with you in part. "Trying" to steer us clear - exactly what was he supposed to do each time Congress shot his proposals down? Declare martial law and have Congress disbanded? Maybe have the military occupy the Senate and force them to pass his proposals? - LOL
But, regardless of whether or not he was able to "steer" things away, I don't believe he tried hard enough. He should have brought this to the forefront of the public consciousness in a forceful way. And pounded in the warnings over and over. VERY publicly. I DO fault him for not doing that.
But then again, all the dems opposed him because they said nothing was broke, so, I guess you could say it happened on their watch, too...
Yes, we needed more deregulation in once sense, we needed the regulations forcing lenders to make bad loans done away with. Once groups like ACORN would have no legal recourse to force bad loans, maybe we wouldn't be in this mess as deep.
As I understand it, when McCain first went to Washington, he was opposed to the original proposal, (before the first version that was voted on), which was the worst one of them all. Changes were made and then he supported the proposal that got voted on (and voted down, thank God)....
Speaking of not reading the proposal, is that kindof like how Pelosi rushed the Monday vote (that failed) thru and, as many complained, didn't even give the House time to read thru the proposal? Isn't it just a little strange how the House was to vote first thing Monday morning, while the Senate was scheduled to vote on it Wed? Anyone smell politics?
October 2, 2008 at 8:43 a.m. ( permalink | suggest removal )
goodoleboy (anonymous) says...
I'm paying attention sir, and your logic is not sound, fling mud at the left all you want. but this administration is very much at fault here. If this happened on the watches of Carter and Clinton like then why was it not corrected? You make no sense sir.
October 2, 2008 at 8:45 a.m. ( permalink | suggest removal )
goodoleboy (anonymous) says...
open eyes
Dems have only held the senate the last 2 years, hard to blame them. My problem is that Bush has not focused on what he needs to be focusing on, the problems here at home, this crisis could have averted had he been more vocal and firm, now we all have $10,000 bill to pay, just great. Not mention that New Orleans is still a 3rd world country, but the surge is working right?
October 2, 2008 at 8:51 a.m. ( permalink | suggest removal )
open_eyes (anonymous) says...
The dems killed his proposals in committe in 2003. You don't always have to be in power to affect the outcome. Witness Monday's vote - if all the dems had voted for it, they wouldn't have needed a single Repub vote to pass it - but 95 dems voted against it.
I'll give you that - the same point I have agreed on. Maybe you managed to put it better than I did - he needed to focus more on the mounting problem at home.
I would like to get ahold of the guy from the American Institute that predicted this disaster back in 1999. Because, basically, what the blame-Bush-deregulation crowd is telling me, that even before the election, he somehow knew who was going to win, and knew that they would deregulate things and cause this crisis, and somehow knew all that back in 1999. Smart man. I'd like to get ahold of him and find out 1) his stock picks, and 2) what the winning lottery number will be next week. Since apparently he based all his predictions on things that had not yet happened.
I'm real curious how New Orleans would have played out had someone else been president. Do you think we would have been much better prepared, and the response much better? I guess we could go on and on about whether or not much of NO was a 3rd world country BEFORE Katrina, but in that case, I blame those who were constantly told over and over the dikes would not hold, given the land and area where they were located.
October 2, 2008 at 9:11 a.m. ( permalink | suggest removal )
open_eyes (anonymous) says...
goodoleboy, when people say that it happened on the watches of Carter & Clinton, they are referring to things that they set in motion that have far-reaching consequences down the line. Now, I don't totally blame Carter - I think the Community Reinvestment Act is a good-intentioned thing. But it got out of hand when Clinton pushed it too far. But, at the time, it created some good economy - for the short term.
What was happening was recognized by many, not just Bush & McCain, but some dems as well. But, as we agree, Bush did not push it hard enough when he had the reigns. And, do some research into his 2003 proposal, and see exactly who killed it and how, and their stated reasons for doing so. Barney Frank was on TV last night - the reporter asked him straight out about his 2003 denial that anything was wrong. He claimed that, in 2003, nothing WAS wrong. Funny how Bush and others thought there was a mounting crisis. Talk about denial. And this is the person that chairs the House Financial Services committee?????
Now, as Rev Wright says, "the chickens are coming home to roost".
October 2, 2008 at 9:18 a.m. ( permalink | suggest removal )
goodoleboy (anonymous) says...
I understand what Carter and Clinton did, what I am referring to is why was it not changed or altered by Reagan, Bush or Bush JR.? So many people here inject partisanship into these topics when in fact both parties are at fault. In my eyes unless the problem is solved or addressed then everyone in a position to deal with it that does not is guilty in my eyes.
I have always been best man for the job, not a party guy, sickens me to see people go blind when they have to look at their own.
October 2, 2008 at 10:14 a.m. ( permalink | suggest removal )
open_eyes (anonymous) says...
goodoleboy, finally, I couldn't agree with you more.
Sometimes things don't get changed because at the time they are too popular. Nobody wanted to be the bad guy to nix the housing boom that this created. Sometimes the best person for a particular job isn't always the most popular. As long as it doesn't come to a head on your watch, it's always easier to pass it on to the next one to deal with it.
Even though I'm sure I do sound like it at times, I don't so much try to inject partisan politics into it - what I've mostly tried to do is open some of the blind eyes that just like to run with the popular Pelosi fad that "it's all Bush's fault".
October 2, 2008 at 10:22 a.m. ( permalink | suggest removal )
create (anonymous) says...
If Bush believed there was an impending crisis in the housing market, he could have spoken to the people to alert them and explain the situation, not once, but several times as he has been doing this past week. I'm sure people would then put pressure on their reps as they have been doing this week.
I must agree with you here: "Nobody wanted to be the bad guy to nix the housing boom that this created." A lot of people were laughing all the way to the bank especially those real-estate brokers. I'm sure they were chomping at the bit to warn clients against sub-primes and ARM's.
October 2, 2008 at 10:46 a.m. ( permalink | suggest removal )
open_eyes (anonymous) says...
Exactly, create. Even though he was aware of it and warned about it, and tried to get legislation to correct it, I totally agree he did not do enough. He should have been talking about it on national TV repeatedly until people were aware enough to start pushing their representatives. Even then, I'm not sure if he could have gotten anything done. Like we agree, nobody wanted to be the bad guy to stop the housing boom. That would probably include the reps. I agree, they all deserve some blame, from Bush on down.
October 2, 2008 at 10:51 a.m. ( permalink | suggest removal )
goodoleboy (anonymous) says...
With the approval ratings of both Congress and the White House what did they really have to lose lol
October 2, 2008 at 11:35 a.m. ( permalink | suggest removal )
open_eyes (anonymous) says...
Good point, goodoleboy :)
October 2, 2008 at 1:48 p.m. ( permalink | suggest removal )
USNretired (anonymous) says...
With authority goes responsibility. Any other way is moral cowardice. The legislature is at fault here, over many changes of leadership and control. Current holder of the authority hold the responsibility.
October 2, 2008 at 1:52 p.m. ( permalink | suggest removal )
Summer_Breeze (anonymous) says...
USNretired--You hit the nail on the head. "Current holder of the authority hold[s] the responsibility."
In my opinion, trying to pin this economic crisis on the Democrats who were in office EIGHT YEARS AGO is ludicrous. Are you saying there was no way to correct this over the past EIGHT YEARS???? Come on! How stupid do you think we are?
But, truth to tell, there's plenty of blame for this shambles to go around to both Republicans and Democrats, liberals and conservatives, even Wall Streeters and Main Streeters. Yes, the bankers and brokers were greedy and self-serving. But the individuals who didn't have the patience, the self-discipline, the intelligence to WAIT until they could afford their huge homes, fancy cars, and other items of instant gratification are also to blame. The lack of accountability is at crisis proportions in this country, and I'm sick of it.
So, what happens to those people like my husband and me, who have been living within our means, saving and investing for our retirement, paying our bills and managing our money? We're now thrown into the same boat as all the idiots I mentioned in the previous paragraph. Makes me mad as
H - - L!!!!!!!!!!!!!!!!!
October 6, 2008 at 9:27 a.m. ( permalink | suggest removal )
create (anonymous) says...
I'm with you, Summer Breeze, mad as hell. Like you and your husband, I have always believed that people should live within their means, keep good credit, invest in the long term, and save for their futures. I've practiced it all my life only to arrive at this mess.
Yesterday came the news that Countrywide Financial, now a subsidiary of Bank of America, is rewriting loans to foreclosed properties so that homeowners can pay less interest and stay in their homes. I'm glad for them because at least this will preserve property taxes -- we hope they can afford to pay those. We hope they have jobs. But what about me. Who is going to lower my interest rates? Am I being selfish? Lately, I don't feel like I am.
So what do we do now? If we become ultra conservative in our spending habits, main street suffers anyway. I don't know about you, but I have already scaled down my spending considerably because I want to hang on to cash. That's going to hurt some merchants, but I've got to think about me. It's damned if you do and damned if you don't. Have you seen all the ads on TV for investment companies this week? I saw lower gas prices yesterday right here in town. If that continues, I wonder how long it will take for grocery prices to reflect that?
We have no choice but to hang on. At this point, what's the alternative? Hey, the market just opened and the Dow is up by 80 points.
October 7, 2008 at 8:34 a.m. ( permalink | suggest removal )
methusla (anonymous) says...
If anyone wants to get to the root of America's problems, one need look no further than all the elected servants of the people allowing so called "special interest" groups and individuals to influence policy making and law making in America by hiring "lobbyists" to pay for (or bribe, if you will) congressmen, presidents, vice presidents, etc., with huge sums of money, expensive gifts and favors. This practice has gone on for decades and has been allowed by all politicians, political partys, presidents, vice presidents and above all we the people who elect these politicans to serve the best interests of all American taxpayers, let it happen.
Lobbyists and special interest groups or individuals are not concerned with whats best for the welfare of the country or the people, only what will be good or beneficial for them.
October 7, 2008 at 8:56 a.m. ( permalink | suggest removal )
open_eyes (anonymous) says...
One good place to start would be to look at all the earmarks that we, the taxpayers, are also paying for in the $700 billion bailout. Wooden arrows for kids? You gotta be kidding....
October 7, 2008 at 9:51 a.m. ( permalink | suggest removal )
methusla (anonymous) says...
open_eyes- Millions of dollars for wooden arrows, etc. is a perfect example of so called special intrest groups or individuals, lobbying congressmen, etc. for "ear mark or pork barrel spending".
October 7, 2008 at 8:32 p.m. ( permalink | suggest removal )
methusla (anonymous) says...
The really sad thing about special interest groups or individuals hiring lobbyists to influence congressional decisions on policy making, law making, ear mark funds and pork barrel spending is the fact that no one seems to want to end the practice.
Another sad fact is, there is a vice-presidential candidate running for the office of vice president, who was, (is) a state governor that admits to hiring a professional lobbying firm to gain 20+ million dollars in ear mark funds and yet this person is campaigning on the promise of less government spending and cracking down on special interest groups and lobbyists. This is what I term political double talk, as based upon that persons past conduct, I would be hard pressed to believe a word they say.
October 7, 2008 at 8:43 p.m. ( permalink | suggest removal )
methusla (anonymous) says...
create- I too saw a decrease in gasoline prices, but I think that you and I both know that a small decrease in gasoline prices has not lasted for long and when the price goes back up it always goes up more than it decreased ! Besides oil prices are on the rise again.
As for the decrease in gas prices immediately affecting the price of other merchandise, such as the price of grocerys, etc, it will not happen, if it does happen the prices of grocerys, etc. will decrease at a much slower rate, that is what is known as a trickle down economy.
What worries me is the continued fall of the value of the dollar, if the value of the dollar continues to fall the dollar will be absolutely worthless and if and when that happens, it won't make any difference how low grocery prices get, no one will be able to buy them anyway !
I am afraid the american people are in for a very long and hard time ahead and god willing all we can do is ride it out and try and survive the best we can.
October 7, 2008 at 9:13 p.m. ( permalink | suggest removal )
open_eyes (anonymous) says...
Methusla - You are correct in what you say. Why should we believe any of them?
From http://coburn.senate.gov/public/index...
Democrats won control of Congress in part by criticizing billions of dollars spent on pet projects. Now, freshmen Democrats are benefiting from the same kind of spending, a USA TODAY analysis shows.
All 49 of the new Democratic lawmakers sponsored or co-sponsored at least one project — known as an "earmark" — inserted into the House and Senate spending bills, the analysis found. Freshmen Democrats were the sole sponsors on projects worth $351 million, an average of $7.6 million. Republicans got approval for projects worth $65 million, or $5 million each.
The analysis found that some of the most vulnerable freshmen Democrats in next year's election were among those who got the most money: Eight of the top 10 House freshmen earmark sponsors defeated Republican incumbents, and five won in districts carried by President Bush in 2004.
--------------------------------
So where does that leave us? Although none are clean, McCain is pretty much the only one with a strong record against earmarks.
October 7, 2008 at 9:39 p.m. ( permalink | suggest removal )
methusla (anonymous) says...
open_eyes- You are also correct in your statistics concerning what I call, runaway "earmark and pork barrel spending"and I applaud you for posting the stats.
As anyone can see from your stats and by paying attention to where, how, to whom and why millions in fact billions of dollars of taxpayer funds is given away and used for so called special projects, you will eventually come to the same conclusion I came to a long time ago.
When it comes to trusting politicians to do what is right and beneficial for the country and all american citizens, who can you trust to do what is right and beneficial for all americans, my point being who do you vote for, since both political partys and the politicians of each party care about only two things, 1. which political party is going to have the POWER. 2. The politicans of both partys only care about how much money they can make for themselves and their campaign contributors, by any means possible, while they are in office. Politicians of both party's don't give a hoot about what is best for the country or its citizens. The current 800 billion dollar fiasco is proof of that, the politicans could care less if the money is paid back, it is not there money, it is borrowed money that the taxpayers will have to pay back.
October 7, 2008 at 11:55 p.m. ( permalink | suggest removal )