Republicans: explain why Wall Street had nothing to do with bringing down the economy

Discussion in 'Economy' started by rdean, Jul 17, 2011.

  1. rdean
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    rdean rddean

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    I keep hearing the Recession began because of Freddie/Fannie. Seems it had nothing to do with Wall Street.

    When I explain that 70% of the mortgage market moved to Wall Street and Wall Street sold those mortgages as "securities" and those securities were "insured" and when the securities tanked and the insurance companies had to pay off their debt which were called "derivatives", that was when the economy took a nose dive. The right wingers keep telling me how stupid I am and that's not what happened at all. That it was all Freddie/Fannie and the Democrats.

    So I'm asking those economically savvy Republicans, "What exactly caused the Recession". Please explain in a "step by step" manner. I really want to know.

    I asked one right winger what a "derivative" is and this was their answer:
    "a derivative is a financial instrument"

    So please, from the right wing perspective, explain the financial meltdown. I really want to know. Make sure to explain why Wall Street had nothing to do with the financial meltdown and how derivatives are nothing.
     
  2. expat_panama
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    expat_panama Silver Member

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    It sounds like you're saying is that the '08 drop in mortgage prices was not caused by government officials buying and selling mortgages, and that the real cause was the free market itself and that we want to keep the government officials and do away with the free market.

    That doesn't make sense, what are you trying to say?
     
  3. The Rabbi
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    The Rabbi Diamond Member

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    HE's trying to say that Republicans, whom he has never met one, and people who wokr on Wall Street are EEVUL. That's about all he can say. He sure doesn't know what a derivative is.
     
  4. editec
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    editec Mr. Forgot-it-All

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    I believe that we have already heard the Republican take on it, haven't we?

    Their POV is that the poor and stupid were duped into buying homes they cannot afford and the poor poor banksters were entirely without responsibility for that.

    And the reason they like to go after Fannie and Freddie is because, even though those organziations are privately owned, the perception was that they were backed by the government.

    Of course if you really want the blow by blow answer to what happened to this economy, it won't be found in such simple theories.

    It takes hundreds of pages just to describe the complex interaction of banking and finance to see how the banking system nearly unraveled.

    It is the interconnectedness of banks, and the debt instuments they devised which made the mortgage crises become a crises in confidence in bank balances.

    And the poor, or the middle class who paid too much for their homes can hardly be blamed for that mess.
     
  5. sparky
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    sparky VIP Member

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    i find any accusation of partisanship weak at best after Barny Frank headed the commission that basically handed Wall street a pass to continue on as it did ......
     
  6. editec
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    editec Mr. Forgot-it-All

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    word!
     
  7. rdean
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    rdean rddean

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    With Republicans controlling both houses and the presidency, it was Barney Frank? A gay guy? Republicans let a gay guy have all that power.

    Now I've heard everything. Sounds like Twilight Zone.
     
  8. rdean
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    rdean rddean

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    Selling mortgages to anyone that wants one and then selling the bundled mortgages overseas as "securities" so you could insure them, essentially betting they fail, used to be against the law. Republicans deregulated that early in the Bush administration when they had both houses. Wall Street didn't break the law. They bought the Republican leadership to change the law, which they did.

    It's why no one except Republicans on this board even mention Freddie/Fannie. It's why every politician and economist mentions "Wall Street" and "derivatives". For USMB Republicans to accept it was Wall Street, they would have to accept Republican culpability, which will never happen. Hell, some are now even insisting it was Obama who signed TARP and started the Afghanistan and Iraqi wars. They can't even admit jobs were being lost at 7 or 8 hundred thousand BEFORE Obama was even signed in.

    Worse, they want to take credit for getting Bin Laden. What a bunch of slimes.

    I'm assuming you've heard the word, "Lobbiest". It's what they do.
     
  9. martybegan
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    martybegan Gold Member

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    I am trying to find where they deregulated this in the early 2000's, but from what I see this stuff was going on since the 80s', with Fannie and Freddie issuing the lion's share of these securities.
     
  10. Mad Scientist
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    Mad Scientist Deplorable Gold Supporting Member Supporting Member

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    You lie.

    Glass/Steagall was repealed in 1999 by Clinton and the Republican Congress.

    Glass
     

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