Skip to comments.Blame the bubble on FDR, Jimmy Carter and Bill Clinton
Posted on 10/07/2008 1:10:37 PM PDT by neverdem
Johan Norberg, on his blog JohanNorberg.net, points out the Democratic intervention that caused the financial crisis
SOME milestones in the prehistory of the crisis. 1933: As part of the New Deal, investment banks are stopped from also acting as commercial banks (which would have given them bank deposits and more stability). 1938: As part of the New Deal, president (Franklin D.) Roosevelt creates Fannie Mae and in 1970 Congress creates Freddie Mac. With their implicit government guarantees they can offer cheaper loans and expand until they dominate the American mortgage market. 1989: The American government step(s) in and pay(s) for the savings and loan crisis, which sets a precedent. 1995: The Community Reinvestment Act is revised so that banks and thrifts are forced to give home loans to low and moderate-income households as well. In return they are allowed to repackage and sell those sub-prime risks to others, which Bear Stearns pioneers in 1997. 2001-03: Instead of letting the market get rid of bad businesses and loans after the dotcom bubble and 9/11, the (Federal Reserve) reduces its rate from 6.5 per cent to 1 per cent (with) a dramatic expansion of the money supply, which creates a real estate bubble.
Mae and Mac ran leverage ratios that exceeded 60 to one (cheered on by the Democrats) to keep giving loans to people who could not really afford it. It only took more traditional interest rates for the bubble to burst. The independent investment banks that did not have access to bank deposits collapsed and almost brought the whole system down. All those who now think that the solution is to give more powers to politicians, authorities and central banks should look at what they did with the powers they already had.
IN the past week, the Australian media (has)...
(Excerpt) Read more at theaustralian.news.com.au ...
Excellent, ticking off of the facts in the matter. To bad it in a foreign newspaper and 95% of the American public will not see it.
You, know. Smart people. They can do things.
The reckless borrowing that’s killing us crept up at all levels of society, and crosses political parties. It didn’t begin with Presidents.
Sure it did, in addition to the Congress and Senate, right up to the Oval Office, and down into the gutters of Wall Street.
Regardless of who started it, those that followed are just as responsible and derelict in their duties for allowing an obvious disaster to fester and grow.
The government leadership that followed, right up to our current leadership, is directly responsible for the harm they have caused to this country.
WEVE DONE IT TO OURSELVES AGAIN!!!!
A nation can survive its fools and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and he carries his banners openly against the city. But the traitor moves among those within the gates freely. His sly whispers rustling through all the alleys, heard in the very halls of government itself. For the traitor appears no traitor; he speaks in the accents familiar to his victims, and he wears their face and their garments and he appeals to the baseness that lies deep in the hearts of all men. Cicero, speech to the Roman Senate.
At what point shall we expect the approach of danger? By what means shall we fortify against it? Shall we expect some transatlantic giant to step the ocean and crush us at one blow Never! All the armies of Europe, Asia and Africa combined with all the treasure of the earth (our own excepted) in their military chest, with a Bonaparte for a commander, could not take a drink from the Ohio or make a track on the Blue Ridge in a trial of a thousand years.
At what point, then, is the approach of danger to be expected? I answer, if it ever reach us it must spring up amongst us; it cannot come from abroad. If destruction be our lot we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide.
Abraham Lincoln, 1837
Trust me when I tell you that I have SERIOUS problems with Mr. Lincoln but the power of his mind at least in 1837 is not one of them. He, like many of this nations founders, was a keen student of history and human nature. He understood how nations often killed themselves. If he were alive during our lifetimes, he would probably spend every waking hour reminding us of the perils we face from OURSELVES.
While there are OTHER, earlier instances of Americas suicide attempts, besides Mr. Lincolns 1861 tyranny against the lower half of the country under the guise of INSTANTLY purging us of a slave system that was en route to being voluntarily eliminated several other, more recent instances spring immediately to my alleged mind.
Created in 1979 by Democrat President Jimmy Carter, the Department of Education (2006 budget over $56 BILLION) was ostensibly designed to bring American education into full competition with other industrialized nations of the world.
In 1983, Ronald Reagan (who campaigned on a platform of going to Washington to DISSMANTLE the ED!), concerned that we continued to fall behind, created a commission to study the problem. It published a study of government education here. Its conclusion? “If an unfriendly foreign power had attempted to impose on America the mediocre education performance that exists today,” the commission warned, “we might well have viewed it as an act of war.” In other words, WE or more precisely, the local, state and federal government run public schools — did it to ourselves.
Since the federal Department of Education has wrested yet MORE control from the other levels, student test scores have fallen even further behind our competitors.
We got the federal Department of Energy (2008 budget $24 BILLION) in 1977, also under Democrat Jimmy Carter (anyone see a pattern here?) in response to the energy crisis of 1973 (see Georg Wilhelm Friedrich Hegel for more on this sort of thing!).
Its taken 40+ years of DOE interference in the countrys energy policies but here we are, back in the soup again and this time its a REAL an energy crisis. Thanks to federal regulations, it takes over 12 years to get a PERMIT to constuct a nuclear power plant. By the time the permit IS issued, the technology is nearly obsolete. The result is that while we generate under 20% of our power with nukes, France, for example, produces nearly 80% of its power with relatively clean, safe nuclear energy.
Comes now the FINANCIAL MELT-DOWN and it, too, will be a gift that keeps on giving courtesy of ta da!! — the DEMOCRATS. Bill Klintoon signs DEMOCRAT sponsored legislation further easing the credit worthiness requirements of low income/over-spending folks buying homes. Then, four years ago, after several REPUBLICANS and others began hoisting red flags about the solvency of Freddie and Fannie, DEMOCRATS Chucky Schumer, Barney Frank, Chris Dodd and their lower level congressional DEMOCRAT bobble-headed sycophants including one BARACK OBAMA — went before the media to assure us all that all was well. Oh, did I mention that ALL of these guys were recipients of some very heavy campaign contributions (as distinguished from outright bribes) from Freddie and Fannie?
OK, so some of the high-income idiots in the investment community figured a way to make a buck or a billion. While Im not excusing their greed, barring evidence to the contrary, they were only playing the game by the rules these congress critters or their bureaucratic minions promulgated.
Meanwhile, 700 BILLION TAXPAYER BUCKS (are there any other kind?) LATER, the markets still dont believe that well pull out of the mess with which these welfare state DEMOCRATS have saddled us and our great-grandchildren.
I just hope they dont dig us all up so they can slap us around for allowing these self-important and mindless morons to make a shambles of the place.
Before THEY allowed bread and circuses to become more important than personal and societal responsibility, ancient Rome prohibited two classes of citizens from holding public office: Those of illegitimate birth (bastards) because they had no knowledge of their ancestry, they were assumed to care little or nothing about the lessons of the past. And eunuchs (castrated freed slaves) who, because they were unable to produce offspring, were believed to care little or nothing about the future.
If we have foolishly allowed intellectual and philosophical bastards and eunuchs and not an insignificant number of Mr. Lincolns traitors — to assume positions of power here, I suppose we deserve what we get.
And get it we certainly will.
Given current trends, it looks as though it will start to come down around January 20, 2009!
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I wish the government would butt out now. There would likely be a very painful period, but the bad loans and their purveyors would die, money would flow to safer institutions, and America would be more prudent with saving and investing going forward.
The "bailout" has one main purpose: to shift the pain to the future so it won't impact current politicians re-election.
Thanks for the ping!
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