Saturday, September 20, 2008

From Wall Street to Main Street in real time

Wait a minute. Wait a goddamn minute.

Local TV just carried a story predicting home equity loans are fading fast. In six months, such line of credit loans may not exist.

Wall Street gets $700 billion gift of my tax dollars and I can’t get a loan on the equity I’ve built in my home? That’s my money. Come bail me out, Mr. Bush. I’m retired. I really could use the money. My money.

I don’t buy this stuff about “plenty of time for finger-pointing later.” The bulk of this economic damage happened on George Bush’s watch. That’s the truth of it.

Somebody should go to jail.

3 comments:

Max Fischer said...

Yep. Flush the toilet and gravity takes it all downward. Accountability starts at the top.

Anonymous said...

Send Sarah to Jail and we can quit talking about her!!
JR

The South Plainsman said...

This is certainly happening on George Bush's watch, and those that don't understand it will certainly want to blame him. That is the easy thing to do.

The real problems really started in the 1960s when we as a country starting using credit for consumption at a high rate. Both the people and the governemnt did this.

We started running high fiscal deficits, both governmental and personal. We all wanted evrything right now, rather than working and saving for it.

Long years ago, people were maxing out their credit cards. So was the government. Why not have what we want right now, and let someone else pay for it later? We all ran deficits for over forty years.

Some day, if you borrow a lot, you have to pay it back. Well, the bill is now coming due.

Oh sure, the credit market problems that are in the news is the immediate cause of the current disruption, but is not the root cause. The attempt to get more poor people in housing (the bill encouraging that was passed during the Carter Administration) provided the authority for all of the subprime lending that is one of the bases of the current crisis, and all administrations since have encouraged it. The problem is that it led to very poor lending practices by banks and savings and loans (remember them from 1986?)

Then the banks and other financial institutions got busy with their computers and started carving mortgages and other debts, including credit card debt, into derivatives, which were not subject to regulation and not traded publicly. It is far too complex to go into here, but just understand that nobody knows who owns a lot of that stuff, and since it is not publicly traded, no one knows how to value them. All we know is that some of them are worthless. Which ones? Well, that is the question, and why the credit markets are seized up.

If you want to place the blame, blaming Congress, in addition to the bankers themselves, is the main place to go. Both Republicans and Democrats were the ones responsible for the oversight, and they failed. Probably because the institutions involved gave the pols tens of millions of dollars.

For those that want to knee jerk blame Bush...well, he is somewhat guilty. After all, the buck stops there. But be reminded that in 2003, Bush proposed strict regulations on Fannie Mae and Freddie Mac designed to stop the abuses, and it never got out of committee in Congress. At the time, he pointed out the risks involved.

In the final analysis, to place blame, we should all look directly in the mirror. We elected the SOBs and kept electing them.

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