I thought I was reading the wrong paper when I read:
Did I really read that? The Tribune-Review is blaming the "financial apocalypse" (at least in part) on a lack of action by the Bush Administration's financial regulators? I would have expected to read such clear thinking coming from - well most any place other than DickieCougarMellonScaife's editorial board.History will show that three years ago many prescient people in the banking world tried to warn regulators of the coming financial apocalypse.
But history also will show, as it should, that the Bush administration's banking watchdogs failed us by ignoring or delaying action on those warnings when they still had time to ameliorate some of the worst consequences of the housing meltdown.
As early as January 2006, as a recent Associated Press review of federal documents shows, some lenders were begging regulators to make it harder for banks to give risky mortgages to the patently unqualified home buyers who were inflating a dangerous housing bubble.
But then after all is said and done, the editorial ends with:
Socialists love to blame the financial meltdown on too little regulation. But as the AP's investigation shows, we had all the banking regulation we needed. It was just captured and kept from working as it should have by special-interest politics.Whah? After pointing the finger at the Bush White House, (and citing the AP as a source along the way) they spin it to "special interest politics." But does the AP story actually say what they say it says?
Not really.
The AP story they site begins with:
The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.And this a paragraph away:
Bowing to aggressive lobbying — along with assurances from banks that the troubled mortgages were OK — regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.So there were regulations proposed that didn't see the light of day. Not exactly what the Trib wrote. Close but no cigar.
By the by, does the AP offer up any sort of explanation for the Administration's regulatory inaction? Well, yes. Yes it does:
The administration's blind eye to the impending crisis is emblematic of its governing philosophy, which trusted market forces and discounted the value of government intervention in the economy.Ah - that's a bit different from what Scaife's gang said, huh?
7 comments:
John K: That is true that bankers were begging for stricter regulations. But the likes of Frank, Waters and Dodd blocked all that and enforced the Community Reinvestment Act. The banks wanted to stop loaning money to people who couldn't pay back. But the left insisted that was discrimination and opposed it. You own it liberals. Stop trying to hide.
little boy,
In January, 2006, the GOP had solid majorities in both House and Senate.
So, explain to me how " the likes of Frank, Waters and Dodd blocked all that and enforced the Community Reinvestment Act. "
BTW: Wasn't the Bush Administration touting increased numbers of new home buyers as part of their success at creating "the Ownership Society," as they called it?
As I read the Trib editorial:
The poor, helpless, lenders (Sure, some have called them "predatory lenders," but the Trib would never mention that.)begged the regulators to stop them, before they loaned again........But, regulators never do any good. They only make things worse....
Or so cons would have me believe.
You know, we were calling it a Housing Bubble for years. I would be interested in knowing when that phrase came into common usage. We all know that what any kind of bubble does is collapse, often disastrously. So we should have done something about this years ago.
I will say I wish Democrats had made more of a fuss starting in January 2007. The Republicans have set records for blocked votes to cloture and for holds on legislation, and if the Democrats had made a fuss it might have frightened the markets sooner (which probably wouldn't be a good thing). But Harry Reid seemed more interested in trying to move things incrementally (I guess), and so has not made or encouraged the making of noise about things like the lack of regulation regarding housing.
It is amazing that the left could not get any policy through Congress prior to January 2007 (and hasn’t got much through the Senate since) yet conservative commenters like John K. claim the left successfully ordered lenders like banks and unregulated mortgage providers like Countrywide to provide loans to people who couldn’t pay them back. Despite the efforts of the majority party in Congress, the Republicans. Those poor banks and lenders, ordered not to do their due diligence, ordered to make lucrative loans (as long as house prices went up) by the greedy Democrats, the party of big business … er…the party of making excessive loans to poor people.
(This is, by the way, ignoring all those housing developments with McMansions in high end suburbs all across the country where the housing prices are in the millions, which are emptying and now empty, because the wealthy people who bought houses with interest only mortgages found it makes more sense to walk away. But let’s blame the poor and the advocates for the poor like ACORN, not wealthy bankers or mortgage providers, or the administration whose job it was/is to regulate them.)
John K: Yep, Ed you got it right about the due diligence. Reno threatened them with audits and oversight if she received complaints from ACORN that they were not giving loans to people who could not pay back.
John K: Once again Kimber, LOL LOL How dumb can you be? Dumber than I thought.
Reno? Talk about reaching. You do realize I was using sarcasm (apparently you are incapable of understanding sarcasm) when I said that the bankers/loan providers were ordered to make the loans. They made their loans without due diligence or any consideration for the consequences because they were greedy. They sold the mortgages as (hidden toxic) bundles because they were greedy. And now the country is dropping down a sinkhole because of their greed and the Bush administration's decision to not to do anything to harm potential and actual donors.
Sure, Reno was enforcing the law, up to January 2001, making sure poor people were not discriminated against. The housing bubble would have been in its infancy, not a worry. Then Bush came in and his administration not only no longer cared about whether poor people were discriminated against, they essentially encouraged the banks/loan providers to issue toxic loans. And from January 2003 to January 2007 the Democrats Dodd, Frank and Waters would have had no ability to block the stricter regulations the Republicans never wanted. The Banks/loan providers must decidedly did not want to stop make loans (mostly to rich people, but also to poor people) because the loans were hugely profitable and the housing bubble was never going to end (oops, I used sarcasm again).
Impressively, you actually did blame ACORN and the poor. Bush and you really do hate poor people.
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