Report blames Greenspan, Geithner, DC, Wall St for US decline
Obama's Financial Crisis Inquiry Commission blames DC and Wall St for the housing crisis that trashed the economy
Report blames Greenspan, Geithner, DC, Wall St for US decline
Joseph N. DiStefano
The national Financial Crisis Inquiry Commission of financial heavies has issued a split verdict about what caused the 2007-08 financial crisis and the resulting mass unemployment of 20 million Americans, after more than a year of hearings and study. The 10 members split three ways:
1) The six Democrats all blame government, and say this can be fixed.
2) Three Republicans blame the free market, and says you have to expect this sort of thing from time to time.
3) The other Republican blames Fannie Mae for being too generous to deadbeats.
The majority report blames:
- Alan Greenspan's Federal Reserve, and its New York branch back when current Treasury Secretary Timothy Geithner was running it, and their failure to monitor, discipline and control risky Wall Street mortgage investments;
- The Bush and Clinton administrations for caving into Wall Street's demands for easy regulation;
- Greed and a lack of basic risk management by leading Wall Street firms and the home loan mortgage industry.
Also, credit rating agencies (S&P and Moody's) who praised garbage loans so investors would buy them.
Fannie Mae and Freddie Mac were also run badly, but they weren't the "primary" cause of the mess, the majority found.
And most important: this was all preventable, if government were doing its job and not pretending the market always heals itself, and if investment bankers and mortgage lenders could be counted on to do their jobs ethically; which they couldn't.
Three of the GOP minority members issued a common dissent, which agreed with most of the majority's conclusions as to what happened, but was a lot less sweeping in assigning blame to the Fed or regulators or believing the crisis could have been prevented.
The Republicans basically blames housing price inflation and collapse, as if that were an act of nature, and not something government ought to have much prevented.
The last (GOP) commissioner issued an individual dissent blaming Fannie Mae, Freddie Mac, and Washington's over-liberal housing policy in the Clinton and Bush II administrations.
Read the Financial Crisis Inquirer Commission report and dissenting opinions here.
Ivy League -- recessions, depressions, bubbles, balloons, all brought to a town near you and caused by gov't action.. they that created the system, they that pervert the system, they that again, will fix the system.. they have taken our laws, convoluted them to the point of un-recognizability .. thus so that we need them to navigate and behold , what they themselves can not even understand... in order to live our daiuly lives as wage slaves in poverty. thanks to you folks for all you do.— HykyrJoe
- Why don't u blame Alexander Hamilton while ur at it? ...— sophilaen
The report, while I only read the conclusion, covers many of the contributing causes, the major ones certainly, what it seems to miss is the overall fact that our economic system is prone to systemic failure, triggered at least 3 times in the last 75 years, twice resulting in global economic depressions, including the current one. The peculiarly domestic and parochial republican party allegation, out page 1 of their ideological play book, that GSE policies gave away mansions to the poor and working near poor, with no money, no credit etc is directly contradicted by the international scope of banking failures and economic contraction from the People's Republic of China, to Ireland, Greece, Spain, England, Germany, etc, all of which are not at all affected by low income policies of the US. If anything, their social programs, especially in the more socialist countries,especially the ones with universal health (like all of them) still suffered the banking disaster that we did, but did not lend any money to any poor undeserving or deserving Americans. Would that poor Americans were the source of all our problems, we could just write them all a check for $40k a piece then, we all could go off into economic Shangri La at less cost than ongoing catastrophe.- I think it is hard to put this on any one thing
- What does that have to do with anything?
- Bernanke is following the Japan game plan, and their credit rating has been lowered by S & P. That is where the U.S. is headed under Bernanke's leadership. When will the country wake up and stop it? How can you solve an economy weighed down with too much debt with more debt? When does this all stop? The politicians are too scared to do anything to stop it.— RunningTheBases
- interesting— MikeP
- This report nails it. If you've studied the situation, you'd know that. It's not hard to put this on one thing. It was deregulation and the lack of enforcement of existing regulations by the Bush administration that set the stage for this. It would not have happened without that. The Republicans on the panel who disagree are flat out liars. They know that Fannie Mae was not repsonsible for this. Fannie Mae didn't make those risky loans.— MikeP
