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Old 09-16-2008, 10:38 PM
 
127 posts, read 202,372 times
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Which party ushered in the Great Depression?

The Republican Party controlled the White House and Congress throughout the 1920s.

Presidents Harding (1921-23) and Coolidge (1923-29) were very conservative men who believed strongly in laissez-faire and in the primary role of business in American life.

Americans believed the economy was strong and credited the strength to the Republican party.

Herbert Hoover, also a Republican, was elected President in 1928.

In October of 1929 the stock market crashed, signaling that there were underlying problems with the economy. The Great Depression ensued.

While millions of Americans were out of work and on the brink of starvation, Republicans denied there was anything wrong with the economy.

Democrats took over Congress in 1930.

Franklin Roosevelt, a Democrat, ran against Hoover in 1932 on his platform of a New Deal and won by a landslide.

Republicans criticized Roosevelt’s New Deal during his first four years as President and during the 1936 Presidential race.

Roosevelt won his second term winning 523 electoral votes to 8

Last edited by beachbums2; 09-16-2008 at 10:59 PM..
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Old 09-16-2008, 11:02 PM
 
Location: Orlando, FL
973 posts, read 1,994,620 times
Reputation: 382
Sigh.. here we go again. Which party ushered in this CURRENT financial meltdown?
Read the timeline, or just the summary at the end.


====================================
1933:
The Glass Steagall Act established the Federal Deposit Insurance Corporation (FDIC) in the United States and included banking reforms, some of which were designed to control speculation. It was a reaction of the U.S. government to cope with the collapse of a large portion of the American commercial banking system in early 1933. It prohibited a bank from offering investment, commercial banking, and insurance services.

1977:
The Community Reinvestment Act (CRA) was passed by US Congress under Democrat President Jimmy Carter. It requires banks and thrifts to offer credit throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services, a practice known as "redlining." The purpose of the CRA is to provide credit, including home ownership opportunities to underserved populations and commercial loans to small businesses.

1985-1990:
Democrat Jim Johnson is managing director of Lehman Brothers.

1991:
Jim Johnson becomes Fannie Mae's CEO.
Democrat Frank Raines becomes Fannie Mae's Vice Chairman.

Jan 31, 1995:
Democrat President Bill Clinton, enforcing the CRA of 1977, substantially increased the number and aggregate amount of loans to small businesses and to low- and moderate-income borrowers for home loans. Part of the increase in home loans was due to increased efficiency and the genesis of lenders, like Countrywide, that do not mitigate loan risk with savings deposits as do traditional banks using the new subprime authorization. This is known as the secondary market for mortgage loans. The revisions allowed the securitization of CRA loans containing subprime mortgages. The first public securitization of CRA loans started in 1997.

1996:
Frank Raines joins the Clinton Administration as the Director of the US Office of Management and Budget.

1999:
Frank Raines returns to Fannie Mae as CEO after departure of Jim Johnson.

November 12, 1999:
Bill Clinton repealed the Glass Steagall Act of 1933 for the Gramm-Leach-Bliley Act of 1999. Economists Robert Ekelund and Mark Thornton were critical of this decision, arguing that while "in a world regulated by a gold standard, 100% reserve banking, and no FDIC deposit insurance" the Financial Services Modernization Act would have made "perfect sense" as a legitimate act of deregulation, under the present fiat monetary system it "amounts to corporate welfare for financial institutions and a moral hazard that will make taxpayers pay dearly".

The repeal enabled commercial lenders such as Citigroup, the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities. Citigroup played a major part in the repeal. With lobbying led by Roger Levy, the "finance, insurance and real estate industries together are regularly the largest campaign contributors and biggest spenders on lobbying of all business sectors [in 1999]. They laid out more than $200 million for lobbying in 1998, according to the Center for Responsive Politics..."

2003:
Frank Raines receives over $20 million for the year as CEO of Fannie Mae.

Dec. 21, 2004:
Frank Raines accepts "early retirement" from position as CEO while the US Securities and Exchange Commission investigators allege accounting "irregularities." He's accused by the Office of Federal Housing Enterprise Oversight (OFHEO), the regulating body of Fannie Mae and Freddie Mac, of abetting widespread accounting errors, so that senior executives, including himself, could receive large bonuses each year.

Jan 26, 2005:
McCain, Hagel, Dole, and Sununu present the Federal Housing Enterprise Regulatory Reform Act of 2005 to Congress:
S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005 (GovTrack.us)

2006:
OFHEO announced a suit against Raines in order to recover the $50 million Raines received based on overstated earnings - initially stated as $9 billion, but were only $6.3 billion. The OFHEO sought $110 million in penalties and $115 million in returned bonuses from 3 Fannie Mae executives.

May 25, 2006:
Republican John McCain speaks to the President in Congress on the proposed Federal Housing Enterprise Regulatory Reform Act of 2005:
"Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S.190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I use my colleagues to support swift action on this GSE reform legislation"


2006:
The Bush administration recommended passing the Federal Housing Enterprise Regulatory Reform Act of 2005. Treasury Secretary John Snow, OH-R, supported it. Housing Secretary Mel Martinez, FL-R, also supported it. The Democrat-controlled Congress killed it, using these arguments:
Barney Frank, MA-D: "These two entities - Fannie Mae and Freddie Mac - are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."
Melvin Watt, NC-D: "I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing."


April 18, 2008:
Settlement with Raines, J. Timothy Howard, Fannie Mae's CFO, and Leanne G. Spencer, Fannie's former controller was reached for about $3 million total, which would be paid by Fannie's insurance policies. Raines agreed to donate $1.8 million from Fannie stock and give up stock options, which were of no value. Raines also agreed to give up an estimated $5.3 million related to his pension and "other benefits."

May 22, 2008:
Barack Obama selects Jim Johnson to help select a running mate.

June 7, 2008:
Frank Raines was one of several politicians who received below market rates at Countrywide as one of the "Friends of Angelo" program. He received loans for over $3 million while CEO of Fannie Mae. Frank Raines is on Obama's campaign as a financial adviser.
Jim Johnson resigns from Barack Obama's campaign, as he also received below market rates at Countrywide as one of the "Friends of Angelo" program.
================================================

Summary:
Democrat President Bill Clinton's administration repealed a law that prevented banks and insurance companies from merging due to a conflict of interest. He also heavily encouraged the use of sub-prime loans through CRA of 1977, and also required them to be insured with taxpayer money in 1997. Meanwhile, two Democrat CEOs (Jim Johnson and Frank Raines) of Fannie Mae were grossly inflating accounting numbers to pocket bonuses and give the appearance to investors that the companies are incredibly profitable. John McCain proposed reforms in 2005, and spoke to Congress in 2006, to regulate the housing financial industry, but the Democrat-controlled Congress in 2006 nixed it. In 2006, Raines and Johnson were both linked to inflated bonuses and below-rate loans, and Raines agreed to "early retirement" in addition to fines and loss of stock. Both Raines and Johnson are then selected by Barack Obama - Johnson for Obama's VP selection, and Raines as a campaign finance adviser. Fannie Mae contributes heavily to both party's campaigns, but favoring Democrats 57%:43%. Democrat Barack Obama was #2 in overall contributions since 1999, and #1 since 2002 by a landslide.

Bill Clinton's administration, corrupt Democrat CEOs of Government-sponsored housing agencies (who both happen to have been picked by Obama to help his campaign), and corrupt Democrats in Congress who refused housing regulation reform proposed by McCain 3 years ago are the ones to blame.

Obama is being a hypocrite in recent speeches when he's laying blame to Republicans and McCain for the current financial meltdown and economic situation. Many Democrats have created this problem with Fannie Mae and Freddie Mac, and after years of fighting reform and allowing banking consolidation that amplified the problem, we have the current situation.

Obama likes to say McCain voted with Republicans (Bush) 90% of the time in the last 8 years, but Obama voted with Democrats 97% of the time. Obama was there in 2005, do you think he voted for McCain's housing reform bill in the 3% chance he went with Republicans this time? I want a leader with a history of making the correct decisions on the right issues, not someone who's a puppet of a party.

Who do you trust NOT to put people like Jim Johnson and Frank Raines into cabinet positions or other important positions after the election? (Or Rezko, Ayers, Alinsky, Farrakhan, Rev. Wright, etc) Someone's got some serious history of not only knowing, but being closely associated with some very shady people.
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Old 09-16-2008, 11:07 PM
 
Location: Albemarle, NC
7,730 posts, read 12,714,936 times
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None of it could have been possible if not for Woodrow Wilson (D). He signed the Federal Reserve Act creating the third central bank of the US. It was passed through Congress during the Christmas break in 1913.
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Old 09-17-2008, 12:27 AM
 
127 posts, read 202,372 times
Reputation: 44
Quote:
Originally Posted by ucfjtm View Post
Sigh.. here we go again. Which party ushered in this CURRENT financial meltdown?
Read the timeline, or just the summary at the end.


November 12, 1999:
Bill Clinton repealed the Glass Steagall Act of 1933 for the Gramm-Leach-Bliley Act of 1999. Economists Robert Ekelund and Mark Thornton were critical of this decision, arguing that while "in a world regulated by a gold standard, 100% reserve banking, and no FDIC deposit insurance" the Financial Services Modernization Act would have made "perfect sense" as a legitimate act of deregulation, under the present fiat monetary system it "amounts to corporate welfare for financial institutions and a moral hazard that will make taxpayers pay dearly".

The repeal enabled commercial lenders such as Citigroup, the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities. Citigroup played a major part in the repeal. With lobbying led by Roger Levy, the "finance, insurance and real estate industries together are regularly the largest campaign contributors and biggest spenders on lobbying of all business sectors [in 1999]. They laid out more than $200 million for lobbying in 1998, according to the Center for Responsive Politics..."

This is quite a response you've given. It's a shame it's so late and I won't have time tomorrow to look more closely at it. Maybe I'll have more time later this week.

In the meantime, I did look into the above section a little bit.

Gramm, Leach and Bliley, the sponsors of the act are all Republicans.

Clinton signed the Act, to be sure, but he couldn't have signed it if the three Republicans hadn't sponsored it and the House and Senate hadn't passed it. According to Wikipedia, the bills were passed along party lines with Republican support in the Senate and with bipartisan support in the House of Representatives.

I don't know how you can hang this on the democrats.
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Old 09-17-2008, 01:17 AM
 
Location: DFW, TX
2,935 posts, read 6,127,061 times
Reputation: 571
Quote:
Originally Posted by beachbums2 View Post
This is quite a response you've given. It's a shame it's so late and I won't have time tomorrow to look more closely at it. Maybe I'll have more time later this week.

In the meantime, I did look into the above section a little bit.

Gramm, Leach and Bliley, the sponsors of the act are all Republicans.

Clinton signed the Act, to be sure, but he couldn't have signed it if the three Republicans hadn't sponsored it and the House and Senate hadn't passed it. According to Wikipedia, the bills were passed along party lines with Republican support in the Senate and with bipartisan support in the House of Representatives.

I don't know how you can hang this on the democrats.
I don't know how you can't hang it on both parties. It's time to refresh the tree of liberty... and unlike Jefferson's advice to do it with blood, we can do it with votes. Let's get new ideas in Washington... it's time to end the monopoly of the two headed beast we call the Democratic and Republican parties.
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Old 09-17-2008, 01:20 AM
 
Location: southern california
55,668 posts, read 74,637,859 times
Reputation: 48179
lack of fiscal responsibility precedes an economic crash.
learn to grow chickens and tomatoes.
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Old 09-17-2008, 02:16 AM
 
127 posts, read 202,372 times
Reputation: 44
Quote:
Originally Posted by KantLockeMeIn View Post
I don't know how you can't hang it on both parties.
Hey! ucfjt made it look like it was all Clinton's/the Democrats' doing. At least I posted that it was a bipartisan vote so don't beat me up over it.

With that being said, yes, it was the fault of both parties. I just looked it up and the Senate passed the bill 90-8.

Gramm, a Republican, was the lead sponsor and the one who pushed hard for the bill. (I'm sure you know Gramm is McCain's economic advisor.)
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Old 09-17-2008, 03:07 AM
 
Location: At my computador
2,057 posts, read 3,090,932 times
Reputation: 510
Quote:
Originally Posted by beachbums2 View Post
Americans believed the economy was strong and credited the strength to the Republican party.
That's right! However, no one could foresee the consequences of a nation of idiots speculating in the stock market and California land! (Just like now, except it's speculating with one's home and 401k.) Further, no one could foresee the massive drought or the massive surplus of goods that were backing up.

Quote:
In October of 1929 the stock market crashed, signaling that there were underlying problems with the economy.
That's true! In fact, Coolidge didn't run in '28 because everyone knew it was coming... because of the speculators.

Quote:
While millions of Americans were out of work and on the brink of starvation, Republicans denied there was anything wrong with the economy.
That's false! Hoover acknowledged that things were bad, but we needed to endure the hardship until the economy normalized. (Until the surplus of goods was consumed and production could start again, amongst other things.)

Quote:
Franklin Roosevelt, a Democrat, ran against Hoover in 1932 on his platform of a New Deal and won by a landslide.
And even the newly elected Dem Congress was opposed to what he was doing because it was so anti-American/pro-communist. In fact, he couldn't just get stuff through, he had to push a Constitutional crisis-- more of his attack on America-- by threatening to pack the court. Although the possibility of him being able to do it was unlikely, the crisis was sufficient for the judges to stand down for fear of America becoming more unstable under his reckless practices.

Quote:
Roosevelt won his second term winning 523 electoral votes to 8
Over 17% of my income goes to Social Security/Medicare and it all started with FDR. I hope the people who voted for him burn in hell for the petty tyranny they've cast upon me. It's not even like they paid their "fair share". They only paid 2%.


So, what were you getting at? FDR was a socialist pig and Americans of the 30's were scum? You've convinced me.
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Old 09-17-2008, 03:39 AM
 
127 posts, read 202,372 times
Reputation: 44
ucfjtm posted:

1977:
The Community Reinvestment Act (CRA) was passed by US Congress under Democrat President Jimmy Carter. It requires banks and thrifts to offer credit throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services, a practice known as "redlining." The purpose of the CRA is to provide credit, including home ownership opportunities to underserved populations and commercial loans to small businesses.

Jan 31, 1995:
Democrat President Bill Clinton, enforcing the CRA of 1977, substantially increased the number and aggregate amount of loans to small businesses and to low- and moderate-income borrowers for home loans. Part of the increase in home loans was due to increased efficiency and the genesis of lenders, like Countrywide, that do not mitigate loan risk with savings deposits as do traditional banks using the new subprime authorization. This is known as the secondary market for mortgage loans. The revisions allowed the securitization of CRA loans containing subprime mortgages. The first public securitization of CRA loans started in 1997.

beachbums2 posts:

Excerpts from:

The Democratization of Credit
Washington Post
December 3, 2007

The Democratization of Credit - washingtonpost.com


"Thirty years ago, Congress passed and President Jimmy Carter signed the Community Reinvestment Act. It was ushered into law with little fanfare and has received little notice since. Yet in the span of just one generation, the law has virtually transformed America's cities and neighborhoods."

"Sen. Jake Garn of Utah argued that the CRA would "destroy the housing industry in this country." In fact, the opposite happened. In a nationwide survey conducted by the Federal Reserve, 98 percent of large residential lenders reported that their CRA loans were profitable. Within that group, 24 percent found them as profitable as or more profitable than conventional loans. Unexpectedly, banks came to see CRA communities as emerging markets.

"Citizens Financial Group has built a highly successful business around these emerging markets. In the last 15 years, we've grown from the sixth-largest bank in the smallest state in the country to the eighth-largest bank in the United States with over $160 billion in assets. Based in Providence, R.I., we have banks in 13 states, and our commercial banking operation includes an office in Vienna. This growth took place not in spite of our commitment to the CRA, but because of it. We now speak more than 70 languages at our branches. Many of these branches are in markets that we probably wouldn't have entered without the CRA."

"The CRA has convinced us that when businesses invest in distressed communities, they are much more likely to return to health. As we commemorate its 30th anniversary, we ought to celebrate the Community Reinvestment Act by shifting our thinking to a broader definition of responsibility, shared by more, and investing more deeply in the people who invest in us."
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Old 09-17-2008, 03:47 AM
 
127 posts, read 202,372 times
Reputation: 44
Quote:
Originally Posted by One Thousand View Post

That's false! Hoover acknowledged that things were bad, but we needed to endure the hardship until the economy normalized. (Until the surplus of goods was consumed and production could start again, amongst other things.)
The depression lasted 10 years or longer. How were unemployed and starving people supposed to endure for that long? Hoover was clearly out of touch and people knew it. That's why Roosevelt won by a landslide.
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