Why was the DNC allowed to create the financial crisis,

Discussion in 'Economy' started by alan1, Jan 1, 2009.

  1. alan1
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    alan1 USMB Mod Staff Member Supporting Member

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    Why was the DNC allowed to create the financial crisis, and why should we trust them to fix it?

    New Agency Proposed to Oversee Freddie Mac and Fannie Mae - New York Times
    snip,
    Probably 90% of the current economic problems in the US were caused by the failure of the congressional Financial Services Committee headed up by Barney Frank when they halted this action proposed by Bush 5 years ago.

    And, we also have this, http://www.nytimes.com/2005/04/06/b...ml?_r=1&scp=3&sq=Fannie mae regulation&st=cse from 3.5 years ago.
    Snip,
     
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  2. WillowTree
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    WillowTree Diamond Member

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    Firstly.. :eusa_shhh: and secondly, we don't trust em! :lol:
     
  3. mash107
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    mash107 Active Member

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    They definitely contributed to the mess, but were hardly responsible. You can't have bubbles without easy credit created by the Federal Reserve, and until you do destroy the Fed, or limit it's power with a gold standard, one can't blame other interventions. Both the GOP and DNC gain from the Federal Reserve printing press, and so I hardly see a difference between the two.
     
  4. alan1
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    alan1 USMB Mod Staff Member Supporting Member

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    I just find it interesting how media like the NY Times was so willing to publish stories like those linked above way back before things went to hell in a handbasket, but somehow, it is now all Bush's economic policies that somehow screwed everything up.
    I think there is plenty blame to go around to almost all politicians, yet it seems that most people want to ignore facts and just point the finger at one man despite the facts that he was only one player in this game. It's like blaming the quarterback for the halfback fumbling the ball after he was 10 yards into his run.
     
  5. Toro
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    Toro Diamond Member

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    Because they didn't create the financial crisis.
     
  6. alan1
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    alan1 USMB Mod Staff Member Supporting Member

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    I take it you didn't read the linked articles before you posted.
    Tsk, tsk.
     
  7. Toro
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    Toro Diamond Member

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    Some very simple facts.

    - Most subprime mortgages were not guaranteed by Freddie and Fannie.
    - Freddie and Fannie held relatively few subprime and Alt-A mortgages on their balance sheets. Freddie and Fannie accounted for about 10% of all subprime mortgages, meaning. Freddie and Fannie subprime mortgages accounted for about 1% of all mortgages.
    - Freddie and Fannie were underexposed to the hottest housing markets which have also had the biggest busts because most loans guaranteed and warehoused by the GSEs are "conforming" loans, meaning they are below a certain price level and have a 30-year term. In the hottest housing markets, most loans were non-conforming and thus outside the purview of the GSEs.

    It is true that the financial mess is not primarily Bush's fault - the primary culprit is the Fed. But it is certainly more so the Republicans' than the Democrats' because increasing deregulation which caused the bubble to inflate even higher.
     
  8. Toro
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    Toro Diamond Member

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    I've read that many times in the past. I am more than aware of the regulatory issues that have surrounded the mortgage market.
     
  9. Care4all
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    Care4all Warrior Princess Supporting Member

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    This mess is MUCH BIGGER than Party....

    Fannie and Freddie's problems are itty bitty compared to the others, and compared to those banks and financial institutions that did not even deal with Fannie and Freddie.

    Some oversight from the Federal Agencies supposedly governing them would have solved alot as well as congress's.

    Please don't think that the Democrats stopped the Legislation that Hagel had introduced which would have governed them SOMEWHAT more, (still not enough to stop what happened with all the banks etc).

    The Republicans had the Majority at the time of Hagel's proposed legislation and the republican leadership DID NOT even bring his legislation up for debate and a vote on the floor of the Senate.

    When I first heard this, I KNEW something was up...couldn't figure out for the life of me, IF the Republicans really wanted to regulate Fannie and Freddie more, WHY OH WHY did they not even bring up this legislation to regulate for a vote?

    Even if the Democratic members eventually filibustered it, bringing it to the floor for debate would have brought attention to the issue and gotten our press and public more inquisitive and informed on what was going on....

    BUT the Republican Leadership did not bring it up for a vote....HOW STRANGE, I thought?

    So then, a couple of months after we first start seeing all the cut up and melded tapes of what Barney Frank had said regarding this issue and all those on the right BLAME one single person, Barney Frank for the FAILURE of the Hagel bill to regulate more pass....and I just couldn't figure out how BFrank could have anything to do with such, SINCE the Republicans were in the Majority and controlled what legislation came to the FLOOR, not the Democrats???

    THEN, there is this article....here is a clip or two of it:

    And I might add, even if this legislation had passed and become affective in 2006, it still would have been too LATE, to help the scenario....it had begun the bust already.

    This does not even hit on Hedge funds and derivatives, and the numerous concoctions of subprime mortgages, or the Bush administration involvement of their BIG INITIATIVES to put millions in to homes by 2010, or the fact that companies that issued mortgages did not have to hold on to their mortgages and could sell them off to others, or Mortgaged backed securities where they bundled good mortgages and college loans with subprime mortgages to mask their risk and the insuring of those insuring those high risk tools, or the Fed keeping interest rates too low, etc etc etc...

    THIS was a PERFECT STORM....Since the 2000 movie by the same name, the phrase has gained popularity and grown to mean any event where a combination of circumstances will aggravate a situation drastically.

    Those from the new england area know the story of the Perfect Storm well!
     
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  10. alan1
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    alan1 USMB Mod Staff Member Supporting Member

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    The subprimes were made by other banks, knowing they had a willing buyer of those bad loans in Freddie and Fannie. Were the government sponsorship (of Freddie and Fannie) not available, those banks wouldn't have made bad loans.

    The linked articles explicitly point out how Republicans were trying to regulate this farce, yet you blame the Republicans for deregulation. You might want to pay attention to your own signature line.
     

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