Did the republicans cause the crisis at fannie and freddie? (activist, 9/11)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Cap'n...I've seen many of your posts and agreed with them all, until now. This crisis had it's early beginnings with the repeal of the Stegall Glass Act back in the early 90's. This act was brought into law after the Great Depression, and was lobbied for repeal by Citigroup (then called CitiBank) for over 10 years. Legislation for it's repeal was introduced by 2 Republican Senators, and signed into law by President Clinton, in 1992 I believe.
This allowed financial institutions to mix all types of funds and investments, deposits and mortgages, etc. altogether whereas before they were required to be seperate.
A simple Wikepedia search for Glass Steagall Act will put things in perspective. This crisis was brought on by both parties, and both share equal blame in the mess. That being said, anyone with a decent education and a basic understanding of economics knows that Obama's tax plan will crash this economy for years to come. McCain is the only reasonable choice if the economy is your #1 issue, which, alongside National Security, is the case for me.
that was 1 piece of legislation that paved the way for the next piece that launched the mortgaged industry in '94
besides clinton admitting 2 X that he is at fault what more do you need?
oh ya the crisis foundation started in 76 or 77 when they passed the reinvestment act.
""The CNN/Opinion Research Corporation poll also finds that by a two-to-one margin Americans blame Republicans for the current financial crisis.
Forty-seven percent of registered voters say Republicans are more responsible for the state of the economy, compared to 24 percent of registered voters who say Democrats are more responsible. ""
This would be funny if it were not so sad.
Because a dippy CNN poll has concluded that some dopes think they know something does not make it reality.
No, it has been repeated on cable news that several democrats like Barney Frank are to blame. If you listen to Bill Clinton, he said "it was the democrats in Congress who would not agree to the oversight that the Republicans and he (Clinton) tried to get enforced" by various means. I heard that Pres. Clinton signed the first deregulation bill in '99 and then the Fair Housing Act...if correct?
Of course the Republicans were not the sole cause of the Fannie and Freedie problems - the Democrats had a big hand in this...
However, it is accurate to say that during 2001-2006, when the Republicans ruled and could have pushed reform thru Congress - they chose to do NOTHING...
They knew there was a serious problem brewing and they let it occur...
I have to think part of the reason was the good-press that Bush was getting for his 'Ownership Society'...
As Cassidy wonderfully points out, the meltdown of Wall Street precipitated the collapse of Fannie Mae and Freddie Mac not the other way around:
"Since the collapse of the mortgage-securities market on Wall Street, in the summer of 2007, mortgage securitization had been left mainly in the hands of two companies that operated under government charters to encourage home-ownership: the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). Like the Wall Street firms, Fannie and Freddie had suffered big losses on their vast loan portfolios, and many Wall Street analysts believed that the companies were on the verge of insolvency—an alarming prospect for the U.S. government. In order to finance their purchases of mortgages and mortgage bonds, Fannie and Freddie had issued $5.2 trillion in debt, and although they were technically private companies, their debt traded as if the government had guaranteed it. If the companies defaulted, the creditworthiness of the entire government would be called into question."
The article is long but informative particularly when it comes to the performance of Greenspan and Bernanke in fueling the housing bubble in the face of all evidence of its pending collapse by steadfastly holding on to their ideological convictions that holding down inflation was more important than correcting market speculation.
PS - anybody that thinks that the 2% of subprime mortgages held by Fannie Mae precipitated this crisis is mad.
During those 8 years, Bush preemptively attacked Iraq to prevent a threat that was extremely unlikely, considering that Saddam Hussein had not attacked anyone since 1991.
During those same 8 years, Bush allowed a huge economic crisis to grow right under his nose, without doing anything to prevent it. Bush waited until the very last few months of his 8 years in office, when the economic meltdown was full blown and out of control, before he started pushing for a last minute $700 billion "bail-out" solution.
Isn't it the president's job to surround himself with top-notch economists who keep him informed of the "State of the Union"? Isn't it his job to make major decisions (i.e. "The Decider") to keep the "State of the Union" sound, which would include preventing a "catastrophic economic meltdown"?
Let's face it .... Bush was a completely incompetent president who surrounded himself with "yes men" and "cronies". He was never smart enough for the job (you could easily tell that during the debates) ... and his past history was one failed business after another.
The main reason we are in this economic meltdown is because Bush didn't do the job he was supposed to be doing for the past 8 years.
Bush never blamed his own incompetence for his mistakes. Every time he was accused of any wrongdoing, he would never own up to it. Instead he would simply blame the Democrats for playing "politics".
Bush can now add one more thing to his lifetime of failures. A failed presidency!
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.