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Quote by: lsbskins1  It would help if you guys understood the real problem. 20 Fannie Mae and Freddie Macs could have failed in an honest market and we would be hurting some, but ok. The problem is not the 6% of morgages that failed, the problem is that banks and Wall Street firms sold lottery tickets (credit swaps) on those morgages and on many companies who held those morgages. To drive revenue, AIG and others essentially sold insurance policies on those morgages to hundreds of different people, so that when 1 morgage failed, they owed the estimated value of the home, in full, to hundreds of different people. And despite the fact that Democrats tried from 2001 on to pass laws to regulate that practice, the republicans blocked those efforts over and over. So blaming the home owner who defaulted on a loan for this mess is like blaming a losing horse for the hundreds of rent payments that gamblers lost on the race and/or blaming the horse for all the subsequent eviction notices. |
Let me take this opportunity to agree with Isbskins1. And with GHook. Because there is no exclusivity for passing blame around. You could start with the Republicans overwhelmingly voting to overturn safeguard regulations put into effect during the Depression which allowed lines to blur between investment and commerical banking. Then you can blame the Democrats for allowing the criminal "cookie jar" withdrawals from Fannie Mae ( the politcal weakness of regulators to stop it.) Add in George Bush who constantly crowed about the increases in "minority home ownership" throughout this decade without scratching too deep to find that affordable housing actually meant taxpayer subsidized housing. Blame Wall street for dreaming up these derivatives like the Credit Default Swaps and the SEC for not cracking down on these "creative instruments." (Warren Buffet called these creative monsters financial "weapons of mass destruction" and neither Congress nor the White House wanted to poop the party uncorked by these creative instruments.) Blame Alan Greenspan who praised these instruments and also allowed the housing price balloon to inflate thanks to way-low interest rates and a flood of money. Blame the American people for their inability to save and instead ride the wave of borrowed cash from foreign investors. Blame the borrowers who didn't know what they could afford and what they couldn't and the "fast buck house flippers" who turned the housing market into a casino.
But no one will ever pay for their mistakes (except the taxpayers and their children and grandchildren.) Economics as a high school course is only required in 17 of the 50 states and there has been precious little effort in the past 25 years to change that. What this means is that there will be very few people who will even understand what hit them becasue of the multi layered complexity of this problem. That makes this issue a breeding ground for politics not solutions.
IMO there is only one candidate who gets the economics of it...Ron Paul. He has seen this meltdown coming for years.
YouTube - 2 Ron Paul on Glenn Beck 04 01 2008