Why was the economy in "free-fall" 4 years ago?

[editec]

I heard about Bill Clinton saying this at the DNC. I thought that this was very ironic of him to say this, as if it was Bush's fault, when it was actually mostly caused by what happend during the Clinton Admistration years. The Community Reinvestment Act being ramped up and the removal of the Glass-Spiegal Act are the real causes of our current bad economy. If the Republicans don't explain this clearly, out in the open, they will lose a big opportunity to gain ground.

The whole story of the various steps, laws, policies, banking practices, real estate practices and public responses that decribe why the world's economy collapsed into a balance sheet depression cannot be done in a few words.

Yes, the Clinton Administration owns a great big share of that history.

Every administration back to FDR owns some share of this depression.

But yes I do think you are right that failure to oversee activity in the derivatives market plays a HUGE role in this disaster.

There is no doubt in my mind about that.

 

[Ernie S.]

Wall Street ran a derivatives based Ponzi scheme that destroyed the world economy in 2008.

And it was Republicans who fought to keep the derivatives market unregulated.

And Republicans saw what was going on 2 years earlier but were assured by Barney Franks that there was no problem. We did not need to regulate Fannie/Freddy.

 

[bobcollum]

So what you're really saying is it wasn't W's fault, it was the guy before him.

In a way it was because Janet Reno and the Justice dept were going to sue banks that refused to give housing loans to people who couldn't pay it back
google redlining

Why wasn't it corrected early on in the W administration?

 

[uscitizen]

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It was a little more complicated than something "those guys did".

Good gawd.

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That is precisely why many with absoloutist thinking process cannot understand how it came about.
It just has to be us or them!

 

[Mac1958]

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It was a little more complicated than something "those guys did".

Good gawd.

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That is precisely why many with absoloutist thinking process cannot understand how it came about.

It just has to be us or them!

Yup, keeps things nice and simple.

Amazing.

.

 

[AquaAthena]

Fannie and Freddie cause the collapse.

True story

They gave AAA rating to "No Income No Asset" Loans

I believe there has been more alarm raised about potential unsafty and unsoundness [of Fannie Mae and Freddie Mac] than, in fact, exists."- Barney Frank... 9/25/2003

The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do NOT see. Barney Frank---9/11/ 2003

I want to roll the dice a little bit more in this situation towards subsidized housing."--Barney Frank---9/25/2005

"These two entities--Fannie Mae and Freddie Mac---are not facing any kind of financial crisis." Barney Frank -- 9/11/2003

"Fannie and Freddie are fundamentally sound, they are not in danger of going under----I do think their prospects of going forward are very solid." -- Barney Frank-- 7/14/2008

 

[pwjohn]

I heard about Bill Clinton saying this at the DNC. I thought that this was very ironic of him to say this, as if it was Bush's fault, when it was actually mostly caused by what happend during the Clinton Admistration years. The Community Reinvestment Act being ramped up and the removal of the Glass-Spiegal Act are the real causes of our current bad economy. If the Republicans don't explain this clearly, out in the open, they will lose a big opportunity to gain ground.

Well said. Short, sweet and to the point..

 

[pwjohn]

So what you're really saying is it wasn't W's fault, it was the guy before him.

In a way it was because Janet Reno and the Justice dept were going to sue banks that refused to give housing loans to people who couldn't pay it back
google redlining

Why wasn't it corrected early on in the W administration?

Why wasn't this problem addressed by Obama, Dodd-Frank during their major re-hash of all banking-finance, rules & regulations ? The problem was apparent to all by then, yet they failed to address it..

 

[Full-Auto]

I heard about Bill Clinton saying this at the DNC. I thought that this was very ironic of him to say this, as if it was Bush's fault, when it was actually mostly caused by what happend during the Clinton Admistration years. The Community Reinvestment Act being ramped up and the removal of the Glass-Spiegal Act are the real causes of our current bad economy. If the Republicans don't explain this clearly, out in the open, they will lose a big opportunity to gain ground.

Business didnt fall off the planet for me until Obama had been in office for nine months. That was the finishing touch from two plus years of a dem congress.

 

[bobcollum]

In a way it was because Janet Reno and the Justice dept were going to sue banks that refused to give housing loans to people who couldn't pay it back
google redlining

Why wasn't it corrected early on in the W administration?

Why wasn't this problem addressed by Obama, Dodd-Frank during their major re-hash of all banking-finance, rules & regulations ? The problem was apparent to all by then, yet they failed to address it..

So you don't know either.

Thanks for the response.

 

[Wry Catcher]

I heard about Bill Clinton saying this at the DNC. I thought that this was very ironic of him to say this, as if it was Bush's fault, when it was actually mostly caused by what happend during the Clinton Admistration years. The Community Reinvestment Act being ramped up and the removal of the Glass-Spiegal Act are the real causes of our current bad economy. If the Republicans don't explain this clearly, out in the open, they will lose a big opportunity to gain ground.

Republicans were culpable in the repeal of of G-S so don't hold your breath on their explaining the history. For those who don't know, see:

Legislative history:

"Final Congressional vote by chamber and party, November 4, 1999
The banking industry had been seeking the repeal of the 1933 Glass–Steagall Act since the 1980s, if not earlier. In 1987 the Congressional Research Service prepared a report that explored the cases for and against preserving the Glass–Steagall act.[3]

"Respective versions of the legislation were introduced in the U.S. Senate by Phil Gramm (Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa). The third lawmaker associated with the bill was Rep. Thomas J. Bliley, Jr. (R-Virginia), Chairman of the House Commerce Committee from 1995 to 2001.

"During debate in the House of Representatives, Rep. John Dingell (Democrat of Michigan) argued that the bill would result in banks becoming "too big to fail." Dingell further argued that this would necessarily result in a bailout by the Federal Government.[4]

"The House passed its version of the Financial Services Act of 1999 on July 1, 1999, by a bipartisan vote of 343-86 (Republicans 205–16; Democrats 138–69; Independent 0–1),[5][6][note 1] two months after the Senate had already passed its version of the bill on May 6 by a much-narrower 54–44 vote along basically-partisan lines (53 Republicans and 1 Democrat in favor; 44 Democrats opposed).[8][9][10][note 2]

"When the two chambers could not agree on a joint version of the bill, the House voted on July 30 by a vote of 241-132 (R 58-131; D 182-1; Ind. 1–0) to instruct its negotiators to work for a law which ensured that consumers enjoyed medical and financial privacy as well as "robust competition and equal and non-discriminatory access to financial services and economic opportunities in their communities" (i.e., protection against exclusionary redlining).[note 3]

"The bill then moved to a joint conference committee to work out the differences between the Senate and House versions. Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act and address certain privacy concerns; the conference committee then finished its work by the beginning of November.[9][12] On November 4, the final bill resolving the differences was passed by the Senate 90-8,[13][note 4] and by the House 362-57.[14][note 5] The legislation was signed into law by President Bill Clinton on November 12, 1999."


LInk: Gramm

See the connection here of those "Time" characterized as most at fault. Clinton is not mentioned as one of "the 25".

 

[Eaglewings]

Bush's SEC let Wall Street run a derivatives Ponzi scheme that destroyed the world economy.

Bush was the goose that flew into the engine.

Obama landed the plane in the Hudson.

 

[Mac1958]

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The deepest, widest, most complex, multi-layered financial catastrophe in the history of the planet, and it's "all that guy's fault over there."

Folks here have to be joking. This cannot be serious. No way.

.

 

[Luddly Neddite]

I had a meeting with a banker who told us that CRA regulators and regulations are intentionally vague to give the government maximum leverage over the banks.

That's a comforting thought

Especially since the GObP crooks want to do away with banking regs.

 

[Luddly Neddite]

Bush's SEC let Wall Street run a derivatives Ponzi scheme that destroyed the world economy.

Bush was the goose that flew into the engine.

Obama landed the plane in the Hudson.

Which is also why Bush's "budget" looked so good.

And, since Obama has included Bush's 8 years of runaway spending on such things as illegal and really stupid wars, with no oversight and NO budgeting, it LOOKS like he has spent more than he has.

Neither pubs, pots nor rw's are honest about this. Not one of them will take responsibility for their own actions.

 

[uscitizen]

During the Bush years I kept getting hell from right wingers for speaking of the Bush economy as a fragile house of cards destined to fall.

 

[Contumacious]

I had a meeting with a banker who told us that CRA regulators and regulations are intentionally vague to give the government maximum leverage over the banks.

That's a comforting thought

That has been the case since, at least , 1913.

The Federal Reserve System is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded.
Today, the Federal Reserve's duties fall into four general areas:
•conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
•supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
•maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
•providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system


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