Can't count the number of posts claiming that the Republicans were responsible, Bush did it, it wasn't the subprime or Fannie and Freddie.
They were wrong.
1. So, it was more than informative to hear a lecture by John Allison, ['John A. Allison ...is an American businessman and is currently the CEO and President of the Cato Institute in Washington, D.C.. Allison held a number of leadership positions in BB&T Corp. from 1987 until 2010 when he retired.' http://en.wikipedia.org/wiki/John_A._Allison_IV], on book TV, yesterday.
2. He clearly laid the blame for the financial crisis where it belongs. The cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to someone else should provide what you want. Lack of personal responsibility signals the end of democracies.
3. "It is a myth that the financial crisis was caused by deregulation of the banking industry, nor was it deregulated under Bush. In fact, there was a massive increase in regulation during the Bush administration: the Patriot Act, the Privacy Act, Sarbane-Oxley.
a. Nor did some new variety of greed make an unexpected appearance.
4. The primary cause of the financial crisis was government policy. Lets keep in mind, we do not live in a free-market economy .we live in a mixed economy, and the degree of regulation depends on the industry in question. The lest regulated is technology. The most regulated is the financial services industry.
a. Government policy caused massive mis-investment, called a bubble.
b. And, while Wall Street made serious mistakes these mistakes were incentivized by government policy.
5. Three government precincts on whom to focus blame are the Federal Reserve, the FDIC, and government housing policy. In 1913, the monetary system was nationalized, in theory, to reduce volatility. Since then, there has been no private system. Thus, any monetary problems are government problems, in exactly the same way that falling bridges or roads would be government problems. Government owns em, as it owns the monetary system.
6. Government Housing Policy, based on the progressive belief that human nature can be changed and utopia reached as long as government has the right set of regulations and policies. In this case, the policy was geared toward increasing home ownership beyond the natural market rate in order to make the new owner a better citizen, with better values. Of course, the belief was false, as the truth is just the opposite: it is the higher values and self-discipline that allow one to save for a house. Incorrect belief, error cascade: bad public policy.
7. A major event in the cause of the financial crisis occurred in September of 1999: President Clinton required that at least half of the loans advanced by Fannie and Fredddie be in affordable housing, i.e., sub prime . The leverage in these two entities was 1000: 1, meaning $1,000 of debt to every $1 of equity.
Even the NYTimes wrote that economists predicted that this would be a disaster, possibly enough to bring down the whole US economy within a decade. Sure enough .9 years later .So, the primary cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to someone else should provide what you want. Lack of personal responsibility signals the end of democracies."
John Allison, on Book TV, 1-27-2013
a. The problem arose because Fanny Mae and Freddie Mac were the key institutions in providing mortgage default insurance and in buying subprime mortgages. There were abuses of the derivative instruments that should have been punished by the market but were not because the perpetrators were ultimately bailed out.
b. It was in the late 1990's, as shown below, under the urging of the Clinton Administration that Fannie Mae and Freddie Mac began to operate as social welfare agencies instead of financial institutions. The insurance premiums on subprime mortgages were too low for the risks involved.
c. An article by Steven A. Holmes from the September 30, 1999 edition of the New York Times describes how the process began that culminated in the financial crisis of September 2008. The article reveals how much wishful thinking there was on the part of government officials that financial institutions could be run like social welfare agencies and how they were forewarned of their folly yet they went ahead and did it. The Nature and the Origin of the Subprime Mortgage Crisis
And so, had FDR not created Fannie and Freddie, had he been restrained by the Constitution, had Clinton, Cisneros, Cuomo not imposed risk on the GSE's, had Dodd and Frank not impeded reform of same.....
....Progressive Democrat ideology would not have resulted in the financial crisis.
Sadly, the truth will mean nothing to the 'reliable Democrat voter.'
They were wrong.
1. So, it was more than informative to hear a lecture by John Allison, ['John A. Allison ...is an American businessman and is currently the CEO and President of the Cato Institute in Washington, D.C.. Allison held a number of leadership positions in BB&T Corp. from 1987 until 2010 when he retired.' http://en.wikipedia.org/wiki/John_A._Allison_IV], on book TV, yesterday.
2. He clearly laid the blame for the financial crisis where it belongs. The cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to someone else should provide what you want. Lack of personal responsibility signals the end of democracies.
3. "It is a myth that the financial crisis was caused by deregulation of the banking industry, nor was it deregulated under Bush. In fact, there was a massive increase in regulation during the Bush administration: the Patriot Act, the Privacy Act, Sarbane-Oxley.
a. Nor did some new variety of greed make an unexpected appearance.
4. The primary cause of the financial crisis was government policy. Lets keep in mind, we do not live in a free-market economy .we live in a mixed economy, and the degree of regulation depends on the industry in question. The lest regulated is technology. The most regulated is the financial services industry.
a. Government policy caused massive mis-investment, called a bubble.
b. And, while Wall Street made serious mistakes these mistakes were incentivized by government policy.
5. Three government precincts on whom to focus blame are the Federal Reserve, the FDIC, and government housing policy. In 1913, the monetary system was nationalized, in theory, to reduce volatility. Since then, there has been no private system. Thus, any monetary problems are government problems, in exactly the same way that falling bridges or roads would be government problems. Government owns em, as it owns the monetary system.
6. Government Housing Policy, based on the progressive belief that human nature can be changed and utopia reached as long as government has the right set of regulations and policies. In this case, the policy was geared toward increasing home ownership beyond the natural market rate in order to make the new owner a better citizen, with better values. Of course, the belief was false, as the truth is just the opposite: it is the higher values and self-discipline that allow one to save for a house. Incorrect belief, error cascade: bad public policy.
7. A major event in the cause of the financial crisis occurred in September of 1999: President Clinton required that at least half of the loans advanced by Fannie and Fredddie be in affordable housing, i.e., sub prime . The leverage in these two entities was 1000: 1, meaning $1,000 of debt to every $1 of equity.
Even the NYTimes wrote that economists predicted that this would be a disaster, possibly enough to bring down the whole US economy within a decade. Sure enough .9 years later .So, the primary cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to someone else should provide what you want. Lack of personal responsibility signals the end of democracies."
John Allison, on Book TV, 1-27-2013
a. The problem arose because Fanny Mae and Freddie Mac were the key institutions in providing mortgage default insurance and in buying subprime mortgages. There were abuses of the derivative instruments that should have been punished by the market but were not because the perpetrators were ultimately bailed out.
b. It was in the late 1990's, as shown below, under the urging of the Clinton Administration that Fannie Mae and Freddie Mac began to operate as social welfare agencies instead of financial institutions. The insurance premiums on subprime mortgages were too low for the risks involved.
c. An article by Steven A. Holmes from the September 30, 1999 edition of the New York Times describes how the process began that culminated in the financial crisis of September 2008. The article reveals how much wishful thinking there was on the part of government officials that financial institutions could be run like social welfare agencies and how they were forewarned of their folly yet they went ahead and did it. The Nature and the Origin of the Subprime Mortgage Crisis
And so, had FDR not created Fannie and Freddie, had he been restrained by the Constitution, had Clinton, Cisneros, Cuomo not imposed risk on the GSE's, had Dodd and Frank not impeded reform of same.....
....Progressive Democrat ideology would not have resulted in the financial crisis.
Sadly, the truth will mean nothing to the 'reliable Democrat voter.'
